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UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C.
20549

FORM 10-KSB

(Mark One)

[ X ]Annual Report Under Section 13 Or 15(d) Of The
Securities Exchange Act Of 1934

For the fiscal year ended June 30, 2007

[ ] Transition Report Under Section 13 Or 15(d) Of The
Securities Exchange Act Of 1934

For the transition period from _____to _____

COMMISSION FILE NUMBER:000-33189

CANYON COPPER CORP.(Name
of small business issuer in its charter)

|NEVADA                                                               | 88-0452792                          
|-------------------------------------------------------------------- | ------------------------------------
|(State or other jurisdiction of incorporation or
      organization) | (I.R.S. Employer Identification No.)
|                                                                     |                                     
|                                                                     |                                     
|Suite 408 - 1199 West Pender Street                                  |                                     
|Vancouver, BC, Canada                                                | V6E 2R1                             
|(Address of principal executive offices)                             | (Zip Code)                          

(604) 331-9326Issuer's telephone number

Securities registered under Section 12(b) of the Exchange Act:
NONE.

Securities registered under Section 12(g) of the Exchange Act:
Common Stock, $0.00001 Par Value
perShare

Check whether the issuer is not required to file reports
pursuant to Section 13 or 15(d) of the Exchange Act. [ ]

Check whether the issuer (1) filed all reports required to be
filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or
for such shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90 days.
Yes [ X ]No [ ]

Check if there is no disclosure of delinquent filers in response
to Item 405 of Regulation S-B contained in this form, and no disclosure will be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB. [ ]

Indicate by check mark whether the registrant is a shell company
(as defined in Rule 12b-2 of the Exchange Act). Yes [ ] No [ X ]

State issuers revenues for its most recent fiscal year:
$NIL

State the aggregate market value of the voting and non-voting
common equity held by non-affiliates computed by reference to the price at which
the common equity was sold, or the average bid and asked price of such common
equity, as of a specified date within the past 60 days. (See definition of
affiliate in Rule 12b-2 of the Exchange Act). $10,927,099 on the basis of the
average of the bid and ask price of the registrants common stock on September
11, 2007.

State the number of shares outstanding of each of the issuers
classes of common equity, as of the latest practicable date: 71,981,399,
as at September 11, 2007.

Transitional Small Business Disclosure Format (Check one): Yes [
] No [ X ]

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|CANYON COPPER CORP.             
|--------------------------------
|ANNUAL REPORT ON FORM 10-KSB    
|FOR THE YEAR ENDED JUNE 30, 2007
|                                
|                                
|TABLE OF CONTENTS               

|PART
      I   |                                                                                                                                                   | 3 
|-------------- | ------------------------------------------------------------------------------------------------------------------------------------------------- | --
|ITEM 1.        | DESCRIPTION OF BUSINESS.                                                                                                                          | 3 
|ITEM 2.        | DESCRIPTION
      OF PROPERTY                                                                                                                     | 8 
|ITEM 3.        | LEGAL PROCEEDINGS                                                                                                                                 | 17
|ITEM 4.        | SUBMISSION
      OF MATTERS TO A VOTE OF SECURITY HOLDERS.                                                                                        | 17
|PART II        |                                                                                                                                                   | 18
|ITEM 5.        | MARKET FOR
      COMMON EQUITY AND RELATED STOCKHOLDER MATTERS AND SMALL BUSINESS ISSUER
      PURCHASES OF EQUITY SECURITIES.                    | 18
|ITEM 6.        | MANAGEMENT'S DISCUSSION AND
      ANALYSIS OR PLAN OF OPERATION.                                                                                  | 19
|ITEM 7.        | FINANCIAL
      STATEMENTS.                                                                                                                       | 29
|ITEM 8.        | CHANGES IN AND DISAGREEMENTS
      WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE                                                        | 30
|ITEM 8A.       | CONTROLS AND
      PROCEDURES.                                                                                                                    | 30
|ITEM 8B.       | OTHER INFORMATION.                                                                                                                                | 30
|PART
      III |                                                                                                                                                   | 31
|ITEM 9.        | DIRECTORS, EXECUTIVE
      OFFICERS, PROMOTERS, CONTROL PERSONS AND CORPORATE GOVERNANCE; COMPLIANCE
      WITH SECTION 16(A) OF THE EXCHANGE ACT | 31
|ITEM 10.       | EXECUTIVE
      COMPENSATION.                                                                                                                     | 35
|ITEM 11.       | SECURITY OWNERSHIP OF
      CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS                                              | 36
|ITEM 12.       | CERTAIN
      RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE.                                                                  | 40
|ITEM 13.       | EXHIBITS                                                                                                                                          | 41
|ITEM 14.       | PRINCIPAL
      ACCOUNTANT FEES AND SERVICES                                                                                                      | 44
|SIGNATURES     | 45                                                                                                                                               

2

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PART I

|ITEM 1. | DESCRIPTION OF BUSINESS.
|------- | ------------------------

FORWARD-LOOKING STATEMENTS

Certain statements contained in this Annual Report on Form
10-KSB constitute forward-looking statements. These statements, identified by
words such as plan, anticipate, believe, estimate, should, expect
and similar expressions include our expectations and objectives regarding our
future financial position, operating results and business strategy. These
statements reflect the current views of management with respect to future events
and are subject to risks, uncertainties and other factors that may cause our
actual results, performance or achievements, or industry results, to be
materially different from those described in the forward-looking statements.
Such risks and uncertainties include those set forth under the caption
"Management's Discussion and Analysis or Plan of Operation" and elsewhere in
this Form 10-KSB. We advise you to carefully review the reports and documents we
file from time to time with the Securities and Exchange Commission (the SEC),
particularly our quarterly reports on Form 10-QSB and our current reports on
Form 8-K.

As used in this Annual Report, the terms we, us, our,
Canyon Copper, and the Company mean Canyon Copper Corp., unless otherwise
indicated. All dollar amounts in this Annual Report are expressed in U.S.
dollars unless otherwise indicated.

Overview

We were incorporated on January 21, 2000 under the laws of the
State of Nevada under the name Aberdene Mines Limited. We subsequently changed
our name to Canyon Copper Corp. on August 8, 2006.

We are an exploration stage company engaged in the acquisition,
exploration and development of mineral properties. We currently hold 100% title
in two major claim blocks comprising a total of 1,332 mineral claims, covering
approximately 27,440 acres located in Mineral County, Nevada (the New York
Canyon Claims), and a third block of claims consisting of 18 patented mineral
claims covering an area of approximately 361 acres, located within the vicinity
of the New York Canyon Claims area (the Jaycor Claims). We collectively refer
to the New York Canyon Claims and the Jaycor Claims as the New York Canyon
Project.

Recent Corporate Developments

Since our fiscal quarter ended March 31, 2007, we experienced
the following significant corporate developments:

|1. | On September 25, 2007, we entered into a termination
      agreement (the Termination Agreement) with Mark Reynolds, pursuant to
      which our consulting agreement dated January 19, 2006 was terminated. In
      accordance with the terms of the Termination Agreement, we agreed to pay
      Mr. Reynolds all unpaid consulting fees upon the earlier of two years from
      the date of the termination agreement, or upon our completing financing
      with minimum net proceeds of $2,000,000. Also, Mr. Reynolds agreed to
      waive all consulting fees payable to him for the period from July 1, 2007
      to September 25, 2007.                   
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|2. | On September 11, 2007, Mark Reynolds resigned as our Vice
      President, Finance and as a member of our Board of Directors. The
      resignation of Mr. Reynolds was for personal reasons. Mr. Reynolds
      resignation was not due to any disagreements relating to our operations,
      policies or practices.                                                                                                                                                                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|3. | On August 1, 2007, we approved a private placement
      offering of up to 2,000,000 units at a price of $0.25 US per unit to
      investors pursuant to Regulation S of the Securities Act of 1933 (the
      Securities Act). Each unit consists of one share of our common stock and
      one share purchase warrant entitling the holder to purchase an additional
      share of our common stock at a price of $0.30 for a period of two years
      from the date of issuance. On August 15, 2007, we issued 1,200,000 units
      at a price of $0.25 US per unit to one subscriber pursuant to Regulation S
      of the Securities Act. All units were issued

3

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|   | pursuant to the exemption from registration contained in
      Regulation S promulgated under the Securities Act on the basis of
      representations made by the subscribers that the subscriber was not a
      U.S. person as that term is defined under Regulation S. Proceeds of the
      offering were used for working capital purposes and to fund our mineral
      claim expenditures. There is no assurance that we will sell any further
      units pursuant to this offering.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|4. | On June 29, 2007, we issued 2,234,136 units at a price of
      $0.25 US per unit to eight subscribers pursuant to Regulation S of the
      Securities Act. Each unit consists of one share of our common stock and
      one share purchase warrant, each warrant entitling the holder thereof to
      purchase an additional share of our common stock at a price of $0.30 for a
      period of one year from the date of issuance. The issuance represented the
      final tranche of our placement offering of up to 5,000,000 units at a
      price of $0.25 US per unit initially approved on December 13, 2006 by our
      Board of Directors. We issued a total of 4,394,136 units to eleven
      subscribers pursuant to the offering. All units were issued pursuant to
      the exemption from registration contained in Regulation S promulgated
      under the Securities Act on the basis of representations made by the
      subscribers that each of the subscribers were not a U.S. person as that
      term is defined under Regulation S. Proceeds of the offering were used for
      working capital purposes to fund our continued operations.                                                                                                                                                                                             
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|5. | On April 25, 2007, we entered into a loan agreement with
      Aton Select Fund Limited (ASF) pursuant to which we received a loan of
      $120,000 from ASF. The loan is evidenced by an unsecured convertible
      promissory note. The loan bears interest at a rate of 15% per annum and
      matures on March 20, 2008. Also on April 25, 2007 we entered into two loan
      agreements with Anthony Harvey, our Chief Executive Officer and a member
      of our board of directors, pursuant to which we received loans of
      US$100,000 and CDN$50,000. The loans are evidenced by an unsecured
      convertible promissory note. The loans bear interest at a rate of 15% per
      annum and mature on March 14, 2008 and April 25, 2008, respectively. Each
      of the above noted loans is convertible at the option of the lender at any
      time prior to maturity into units of Canyon at a price of $0.30 per unit,
      with each unit consisting of one share of our common stock and one share
      purchase warrant. Each warrant will entitle the lender to purchase an
      additional share of Canyons common stock at a price of $0.35 per share
      for a period of two years from the date of issuance of the units. Proceeds
      of the loans were used for working capital purposes to fund our continued
      operations.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|6. | On April 12, 2007 and April 11, 2007, we entered into
      amendments to our loan agreements dated September 12, 2006 and September
      11, 2006, respectively, with Aton Ventures Fund Ltd. (AVF) and Asset
      Protection Fund Ltd. (APF) (together the Lenders) whereby the Lenders
      loaned $500,000 to us. Under the terms of the amendment agreements, AVF
      agreed to extend the maturity date of its loan to October 12, 2007 and APF
      agreed to extend the maturity date of its loan to October 11,
  2007.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  

NEW YORK CANYON PROJECT

We hold interests in the following projects, as described
below:

|1. | the New York Canyon Claims; and
|-- | -------------------------------
|   |                                
|2. | the Jaycor Claims.             

Acquisition and Development of New York Canyon Project

Property Option Agreement with Nevada Sunrise, LLC

Effective March 16, 2007, we acquired 100% title to the mineral
claims underlying the New York Canyon Claims. The acquisition of title to the
claims was completed pursuant to the terms of the Property Option Agreement (the
Property Option Agreement) we entered into with Nevada Sunrise LLC, Robert
Weicker, Sharon Weicker, Kurt Schendel, and Tami Schendel (collectively, the
Optionors) on March 18, 2004.

4

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Under the terms of the Property Option Agreement, we exercised
our option to acquire the New York Canyon Claims by: (i) paying $460,000 to the
Optionors; (ii) issuing 2,000,000 shares of our common stock to the Optionors;
and (iii) incurring exploration expenditures of a minimum of $2,250,000 on the
New York Canyon Claims.

The Optionors also retained a 2% net smelter returns royalty
(the Royalty) over any future production. We have the option to reduce the
Royalty to 1% by making a lump sum payment of $1,000,000 to the Optionors.

Lease Agreement with Jaycor Mining Inc.

On July 21, 2004, we entered into a lease agreement (the Lease
Agreement) with Jaycor Mining, Inc. (Jaycor). Under the terms of the Lease
Agreement, we were granted rights to explore and, if proved feasible, develop 18
patented mineral claims held by Jaycor (the Jaycor Claims). These rights were
granted as a lease for an initial term of 15 years, and are renewable for a
further 15 years. The claims cover a geographic area of approximately 361 acres,
located within the vicinity of the New York Canyon Project area.

As consideration for the lease of the Jaycor Claims, we are
required to pay Jaycor the following amounts prior to the commencement of any
future production activities:

| | (a) | $25,000 on execution of the Lease Agreement (which
      payments have been made);                                                                                                                                                     
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                        
| | (b) | $1,000 monthly commencing on July 21, 2005, the first
      anniversary of the effective date of the Lease Agreement (which payments
      have been made);                                                                            
| |     |                                                                                                                                                                                                                                        
| | (c) | $2,000 monthly commencing on July 21, 2006, the second
      anniversary of the effective date of the Lease Agreement (which payments
      have been made);and                                                                        
| |     |                                                                                                                                                                                                                                        
| | (d) | $3,000 monthly commencing on July 21, 2007, the third
      anniversary of the effective date of the Lease Agreement, and continuing
      for as long as the Lease Agreement is in effect (collectively, the
      Minimum Payments)

In addition to the Minimum Payments, we issued 10,000 shares of
its common stock in 2005 to Jaycor and a further 15,000 common shares in 2006
pursuant to the terms of the Lease Agreement. As of the date of this Annual
Report, we have made all required Minimum Payments under the Lease Agreement and
are in good standing under the Lease Agreement.

The Minimum Payments are considered to be minimum advance
royalty payments. If the production commences in the future, of which there can
be no assurance, the Minimum Payments would be credited against any actual
future royalty payments. If actual royalties payable from production exceed
$9,000 per quarter, the Minimum Payments would cease. If actual royalty payments
are less than $9,000 quarterly, we would be required to pay the difference
between the actual royalty payments and the Minimum Payments. We are also
required to perform at least $100,000 of exploration work annually on the Jaycor
Claims over a four-year period.

The Jaycor Claims under the Lease Agreement are subject to an
overriding royalty deed granted to Kookaburra Resources Ltd. (Kookaburra) by
Jaycor. Upon commencement of production, we are required to pay Kookaburra a net
smelter returns royalty of 1.75%, up to a maximum of $2,000,000. In addition, we
have also agreed to pay Jaycor a net smelter return royalty of 0.5% until such
time as Kookaburra has been paid $2,000,000, at which time the royalty payable
to Jaycor will then increase to 1.5% . The 1.5% rate payable is subject to a
maximum of $2,000,000, at which time the ongoing royalty payment to Jaycor will
be reduced to 0.5% for as long as the Lease Agreement is in effect.

The Jaycor Claims are located in Sections 32, 33 and 34 T8N;
R35E MDBM in Mineral County, Nevada and are recorded as follows:

|Name of Claim | Mineral Survey No. | US Patent # | County Land Parcel
|------------- | ------------------ | ----------- | ------------------
|Mayflower     | 38                 | 10541       | 009-170-11        
|Wall Street   | 43                 | 21509       | 009-170-09        

5

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|Name of Claim  | Mineral Survey No. | US Patent # | County Land Parcel
|-------------- | ------------------ | ----------- | ------------------
|Turk           | 44                 | 21510       | 009-170-09        
|Footwall       | 3447               | 264845      | 009-170-03        
|Nora Higgins   | 3447               | 264845      | 009-170-02        
|Willie Higgins | 3447               | 264845      | 009-170-02        
|Annex No. 1    | 3447               | 264845      | 009-170-03        
|Annex No. 2    | 3447               | 264845      | 009-170-03        
|Annex No. 3    | 3447               | 264845      | 009-170-03        
|Annex No. 4    | 3447               | 264845      | 009-170-03        
|Iron Gate      | 4444               | 806518      | 009-170-02        
|Velvet         | 4444               | 806518      | 009-170-02        
|Saddle         | 4444               | 806518      | 009-170-02        
|Vacation       | 4571               | 982162      | 009-170-12        
|Goodenough     | 4612               | 989401      | 009-170-02        
|Copper Butte   | 4612               | 989401      | 009-170-02        
|Copper Bar     | 4612               | 989401      | 009-170-02        
|Hecla          | 4612               | 989401      | 009-170-02        

The holders of patented minerals claims generally retain all
mineral and property rights, and the permitting procedures for both exploration
and development can be streamlined and fast tracked.

PRODUCTS, MARKETS, DISTRIBUTION, SUPPLIERS, AND CUSTOMERS

We do not currently produce any products, metals, or minerals
nor do we offer any products for sale. We are not party to any distribution
arrangements, and have no principal customers or suppliers. We do not anticipate
any changes in this status for at least the next 12 months, or until such time
as there is a commercially viable mineral or metal deposits located on our
mineral property.

COMPETITION

We are an exploration stage company. We compete with other
mineral resource exploration and development companies for financing and for the
acquisition of new mineral properties. Many of the mineral resource exploration
and development companies with whom we compete have greater financial and
technical resources than us. Accordingly, these competitors may be able to spend
greater amounts on acquisitions of mineral properties of merit, on exploration
of their mineral properties and on development of their mineral properties. In
addition, they may be able to afford greater geological expertise in the
targeting and exploration of mineral properties. This competition could result
in competitors having mineral properties of greater quality and interest to
prospective investors who may finance additional exploration and development.
This competition could adversely impact on our ability to finance further
exploration and to achieve the financing necessary for us to develop our mineral
properties.

MARKETS AND ECONOMICS

Although we compete with other junior exploration companies for
financing, properties of merit, and subcontractors, there is no competition for
the exploration or removal of mineralized material from the New York Canyon
Project. Although there can be no assurance, large and well capitalized markets
are readily available for all metals and precious metals throughout the world. A
very sophisticated futures market for the pricing and delivery of future
production also exists. At present there are no limitations with respect to the
sale of metals or precious metals other than price. The price for metals is
affected by a number of global factors, including economic strength and
resultant demand for metals for production, fluctuating supplies, mining
activities and production by others in the industry, and new and or reduced uses
for subject metals.

DESCRIPTION OF MINING INDUSTRY

The mining industry is highly speculative and of a very high
risk nature. As such, mining activities involve a high degree of risk, which
even a combination of experience, knowledge and careful evaluation may not be
able to overcome. Few mining projects actually become operating mines.

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The mining industry is subject to a number of factors,
including intense industry competition, high susceptibility to economic
conditions (such as price of metal, foreign currency exchange rates, and capital
and operating costs), and political conditions (which could affect such things
as import and export regulations, foreign ownership restrictions). Furthermore,
the mining activities are subject to all the hazards incidental to mineral
exploration, development and production, as well as risk of damage from
earthquakes, any of which could result in work stoppages, damage to or loss of
property and equipment and possible environmental damage. Hazards such as
unusual or unexpected geological formations and other conditions are also
involved in mineral exploration and development.

GOVERNMENTAL CONTROLS AND APPROVALS

Exploration and development activities are all subject to
stringent national, state and local regulations. All permits for exploration and
testing must be obtained through the local Bureau of Land Management (BLM)
offices of the Department of Interior in the State of Nevada. The granting of
permits requires detailed applications and filing of a bond to cover the
reclamation of areas of exploration. From time to time, an archaeological
clearance may need to be obtained prior to proceeding with any exploration
programs.

We plan to secure all necessary permits for any future
exploration. We must provide for all environmental concerns and ensure no
discharge of water into any body of water regulated by environmental law or
regulation. Indigenous and endangered species must only be subject to very
minimal or nil disturbances. Restoration of the disturbed land will be completed
according to applicable regulations and laws. All holes, pits and shafts will be
sealed upon abandonment of the property. It is difficult to estimate the cost of
compliance with the environmental laws since the full nature and extent of our
proposed activities cannot be determined until we start our operations.

We have applied for and received permits from the BLM to
conduct drilling activities on BLM administered lands within the New York Canyon
Project. The BLM reference the property as case file NV N-79198. We are required
to adhere to the stipulations of the permit, primarily to plug all drill holes
as they are completed and to reclaim roads and drill sites when they are no
longer necessary. Reclamation work is ongoing but not complete as the project
remains active.

Our mining operation is regulated by Mine and Safety Health
Administration (MSHA). MSHA inspectors periodically visit our project to
monitor health and safety for the workers, and to inspect equipment and
installations for code requirements. All of our workers have completed MSHA
safety training and must take refresher courses annually when working on our
project. A safety officer for the project is also on site.

Other regulatory requirements monitor the following:

| | (a) | Explosives and explosives handling.                                   
| | --- | ----------------------------------------------------------------------
| | (b) | Use and occupancy of site structures associated with
      mining.    
| | (c) | Hazardous materials and waste disposal.                               
| | (d) | State Historic site preservation.                                     
| | (e) | Archaeological and paleontological finds associated with
      mining.

We believe that we are in compliance with all laws and plans to
continue to comply with the laws in the future. We believe that compliance with
the laws will not adversely affect its business operations. There is however no
assurance that any change in government regulation in the future will not
adversely affect our business operations.

Federal Claim Maintenance Fees

In order to maintain our New York Canyon Project claims each
year we must pay a maintenance fee of $125 per claim to the Nevada State Office
of the Bureau of Land Management and on November 1 of each year we must file an
affidavit and Notice of Intent to Hold the claims in Clark County. We have paid
the required maintenance fees and filed the affidavits required in order to
extend the claims to August 31, 2008.

7

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Environmental Liability

The New York Canyon Project property has a history of
exploration and development dating back to the early 1900s. As such there are a
series of prospect pits, exploration and mine shafts, road cuts and general
mining debris scattered throughout the property. None of this is considered to
be an environmental hazard; however, open mine workings are required to be
fenced for public safety. Operators during the bulk of the exploration of the
property during the 1960s through 1990s conducted their activities in
compliance with BLM requirements. This work has been either reclaimed or
accepted by the BLM. We are not responsible for existing disturbance from prior
activities on the New York Canyon Project.

PATENTS AND TRADEMARKS

We do not own, either legally or beneficially, any patents or
trademarks.

RESEARCH AND DEVELOPMENT ACTIVITIES AND COSTS

We have no plans to undertake any research and development
activities in the foreseeable future, and have not incurred research and
development expenditures to date.

EMPLOYEES

Aside from our officers and directors, we have one full-time
employee at present. Our chief executive officer, officers and board members are
responsible for all planning, developing and operational duties, and will
continue to do so throughout the early stages of our growth. We have consulting
and management agreements with Kurt Bordian, Anthony R. Harvey and Geoffrey
Goodall.

All of our exploration activities are currently carried out
through agreements with the owners or lessors of the claims under option or
lease, consultants and arm's length third parties. We use the services of
subcontractors for exploration work on its properties.

|ITEM 2. | DESCRIPTION OF PROPERTY.
|------- | ------------------------

We currently do not own any real property.

We rent approximately 1,606 square feet of office space located
at Suite 408 - 1199 West Pender Street, Vancouver, BC, Canada at a cost of
approximately $1,500 per month. This rental is on a month-to-month basis with no
formal agreements.

NEW YORK CANYON PROJECT

We hold 100% title to our New York Canyon Claims, subject to
certain royalties, and pursuant to a lease agreement with Jaycor, we were
granted a 15 year lease to explore and develop the Jaycor Claims.

Our New York Canyon Claims consist of two major claim blocks
covering a total of 1,332 mineral claims, covering approximately 27,440 acres
located in Mineral County, Nevada. We refer to the first block of claims as the
"Copper Queen Claims, and the second contiguous block of claims as the
"Longshot Ridge Claims. Further, our Jaycor Claims are comprised of 18 patented
mineral claims covering an area of approximately 361 acres, located within the
vicinity of the New York Canyon Claims.

8

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Figure 1  New York Canyon Property



Location and Access, Climate, Local Resources, and
Physiography

The New York Canyon Project is situated in southern Mineral
County, Nevada. It is located 30 miles east of the county seat at Hawthorne and
five miles east of the community of Luning, NV. Paved state highway US95
provides road access to Reno, NV 160 miles to the north and Las Vegas, NV 290
miles to the southeast.

Access to the property from Luning is by county maintained
gravel surfaced roads and a network of unimproved gravel roads that extend
throughout the property. The claims cover a portion of the western slope of the
Gabbs Valley Range and extend westward into Soda Spring Valley. Elevations range
from 4,600 feet in the valley bottom to over 7,000 feet at the crest of the
Gabbs Valley Range. Relief is gentle to steep over the property and is moderate
in the vicinity of the known mineralized zones.

The New York Canyon region is arid to semi-arid desert with
temperatures to 95F in the summer and average temperatures of 25F in winter.
Precipitation varies between two and 6 inches per year. Physical work could be
conducted on the New York Canyon property year round.

Vegetation of the New York Canyon area is typical of central
Nevada and consists of sagebrush and other desert plants on the lower slopes and
valleys. Shadscale, white sage and greasewood occur with sagebrush on the drier
slopes and hills. Sparse cover of pinion pine and juniper trees occurs at higher
elevations on the property.

Depending on the ultimate extent of mineralization identified
on the New York Canyon Project, the current claim base may be insufficient to
support mining operations, tailings and waste storage and processing plants.
Additional surface lands may be required for such operations. The existing
infrastructure within the project area and the proximity to major centres such
as Hawthorne and Reno are key factors in supporting mining operations.

9

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Figure 2  New York Canyon Property



History

The Santa Fe Silver Mine established this mining district in
1879 with silver production from silver deposits in the district. The discovery
of significant copper deposits in 1893 superseded the silver mining operations
in the area. The New York Canyon Project property has a long history of
exploration, development and production dating back to 1875 when the copper
oxide deposits were first discovered. Between 1906 and 1929, an estimated 8.9
million pounds of copper were recovered from 110,000 tons of ore at an average
grade of 5.5% . Copper production exceeded 4,454 tons between 1906 and 1935.
There was also significant silver production during this period when copper
production reached its zenith.

Modern exploration began in 1964 when Banner Mining Company
(Banner) drilled the Copper Queen and Champion mineral occurrences. During the
mid-1960s through to the late-1970s, several mining companies explored the New
York Canyon Project, primarily for the porphyry copper sulphide potential
completing 124 holes totalling 106,000 feet. In the 1970's, Amax Inc., and later
Conoco Inc. (Conoco) conducted significant exploration programs, completing 24
holes, totaling 20,226 feet. A total of 15 holes were drilled to test the Long
Shot Ridge occurrence. This historic drilling by Conoco, from 1977 to 1981,
indicated 13.2 million tons of mineralized material with an average grade of
0.55% copper for the Longshot Ridge area and 142 million tons grading 0.35% and
0.015% molybdenum for the Copper Queen deposit. In 1979, Conoco conducted a
preliminary metallurgical testing program for copper recovery using drill core.
The Copper Queen deposit yielded average recoveries of 70% copper over the six
day leach period. Acid consumptions varied with rock type: porphyry copper
mineralized rock consumed 160 pounds sulphuric acid per ton while carbonate rich
mineralized rock consumed 509 pounds of sulphuric acid (H2SO4) per ton. Copper
oxide mineralized material provided recoveries ranging from 75.0% to 84.45% with
acid consumption of 232 to 349 pounds H2SO4 per ton of ore.

Further exploration of the property was conducted between 1992
and 1997. Over this time, various joint venture partners primarily tested the
Longshot Ridge and Copper Queen deposit areas with an additional 46 drill holes
totalling 13,018 feet. In 1993, Peter Cowdery, PhD., P.Eng. of CORE Engineering
and Associates conducted an estimate of the mineralized material at the Longshot
Ridge copper oxide deposit for Kookaburra Resources Ltd. The CORE technical
report indicated 17.7 million tons of mineralized material with an average

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grade of 0.55% copper using a 0.23% copper cutoff.

Prior to the acquisition of our interest in the New York Canyon
Project, 129 drill holes totalling 93,858 feet of drilling had been completed on
the property. Mountain States R & D International, Inc.s simulated vat
leach test on minus three-quarter inch copper mineralized material from Longshot
Ridge indicated a 39.41% copper recovery with total acid consumption of 174.7
pounds per ton of mineralized material. The 1993 report states that at an
average copper content of 0.57 percent, a ton of Long Shot Ridge mineralized
material contains 11.4 pounds of copper.

General Geology

The New York Canyon Project lies within the central portion of
the Walker Lane Structural Belt, a zone of northwest striking parallel and
sub-parallel, right lateral strike slip faults in the western part of the Great
Basin region. The Walker Lane structural belt developed in an intra-arc setting
during the Cenozoic and extends for more than 400 miles through western Nevada
and into northern California. Tertiary volcanism and related hydrothermal
mineralization have been recognized throughout the length of this structural
break. Significant mining districts are associated with the Walker Lane Belt and
include Comstock, Goldfield, Rawhide, Tonopah-Hall, and Yerington.

The New York Canyon area consists mostly of a conformable
sequence of marine sedimentary rocks of Triassic and Jurassic ages. These rocks
are intruded by granitic rocks of Cretaceous age and locally covered by
non-mineralized volcanic flows of Tertiary age and by Quaternary alluvium and
colluvium in the valley bottoms. Structural displacement of mineralized host
rocks at New York Canyon is generally associated with Walker Lane style
structures that disrupt bedding and provide conduits for mineralized source
fluids.

The oldest rocks are middle to late Triassic age Luning
Formation, predominately dolomite, dolomitic limestone and limestone with
subordinate shale, argillite and conglomerate. Regionally, the Luning Formation
is thought to be more than 10,000 feet thick with thin to medium bedded
carbonate rocks intercalated with siltstone in the lower 1,000-foot portion of
the sequence, and massive to thick bedded carbonate rocks in the upper
4,000-foot portion of the sequence.

The late Triassic age Gabbs Formation conformably overlies the
Luning Formation. The Gabbs Formation is comprised of three members and consists
of a sequence of thin bedded fossiliferous limestone, argillaceous limestone and
calcareous tuffaceous siltstone totalling 400 feet thick at the type locality in
New York Canyon.

The Sunrise Formation of Jurassic age conformably overlies the
Gabbs Formation. The Sunrise is comprised of five members and consists of a
sequence of quartz latite porphyry flows near the base, thin bedded limestones,
siltstones, silty limestone, tuffaceous siltstone, shale and claystone totalling
about 600 to 800 feet thick at New York Canyon and as much as 1,200 feet thick
in the Pilot Mountains to the southeast. The Sunrise Formation is distinguished
from the Gabbs Formation primarily by fossil type.

Conformably overlying the Sunrise Formation is the Jurassic age
Dunlap Formation, a 3,000 foot thick sequence of basal conglomerate, limestone,
clastic sediment, and andesite and rhyolite flows. Intruding these formations
are Jurassic to Cretaceous age multiphase domes, plugs, dikes and sills
consisting primarily of diorite and granodiorite with areas of quartz monzonite,
granite and other associated felsic rock types.

Tertiary age (mostly Oligocene and Miocene age) mafic to felsic
volcanics, volcanoclastics, flows, tuffs, tuffaceous sediments, and continental
sediments form capping units throughout the region in varying thickness to 8,000
feet. Quaternary rocks consist of various alluvial and lacustrine deposits
forming basin fill deposits, with fanglomerates extending out as debris from the
ranges. These units can be 200 feet or more thick.

Property Geology at New York Canyon

The upper New York Canyon area consists primarily of Luning
Formation limestone with the small area of Longshot Ridge overlain by rocks of
the Gabbs and Sunrise Formations. These sedimentary units are in turn intruded
by felsic sills and dikes. In the Longshot Ridge area the Luning Formation (Lfm)
consists of thick-

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bedded limestone and dolomite, typically gray to tan colored
units, which are exposed in the hillsides below the main ridge.

The Gabbs Formation at Longshot Ridge originally consisted of
very thin bedded to laminated limestone and silty limestone intercalated with
siltstone and shale, all of which have been moderately to highly calc-silicate
altered. Remnant bedding textures are locally evident. The three members of the
formation consist of: G1, the lowest unit, a black, bioclastic limestone
intercalated with siltstone, approximately 250 feet thick; G2, the middle unit,
predominantly argillaceous limestone intercalated with calcareous and tuffaceous
siltstone, approximately 200 feet thick consisting; and G3, the upper unit,
predominantly argillaceous limestone intercalated with siltstone, 0 to 200 feet
thick. The Luning-Gabbs contact at the base of the Gabbs Formation is clearly
marked by a carbonaceous (black bioclastic) limestone.

The two lowest members of the Sunrise Formation (Sfm) at
Longshot Ridge are also moderately skarn and calc-silicate altered. The five
Sunrise members are: S1, the lowest unit, argillaceous limestone intercalated
with siltstone and some quartz latite porphyry flows near the base,
approximately 100 feet thick; S2, fossiliferous bedded limestone intercalated
with siltstone and silty limestone, 50 feet thick; S3, shale and siltstone, 250
feet thick; S4, consists of 200 feet of silty limestone and limestone, 200 feet
thick; and S5, the uppermost unit, claystone and limestone, 200 feet thick.

The Dunlap formation, mentioned in the regional description, is
not present in the Longshot Ridge area. Further, only one of the various
regional Tertiary age volcanic sequences is present along the northern flank of
Longshot Ridge. The felsic intrusive rocks (Fi) of Longshot Ridge are primarily
sills with some local dikes. These sills and dikes are typically only 5 to 20
feet thick but quite abundant. Rock types include granodiorite porphyry,
porphyritic quartz monzonite, quartz monzonite porphyry and quartz-feldspar
porphyry. The average bedding at Longshot ridge strikes N75°E and dips 35°
south.The rocks have been severely faulted and folded with
drag and overturned features common. The major faults are curvilinear with
general trends toward the northeast and northwest. Although many of these faults
are fairly high angle, they commonly change dip direction due to the change of
strike of the structure. There are generally two sets of faults, one trending NE
and the other trending NW, with some local faults that strike N and dip steeply
E. For the most part, these appear to be normal faults with displacements
ranging from 50 to 200 feet.

Deposit Types at New York Canyon Project

Mineralization within the New York Canyon Project consists
principally of contact metasomatic copper skarn deposits, porphyry-type
copper-molybdenum mineralization, and a combination or transition of these two
types of mineralization. The propertys copper skarns may be almost entirely
oxidized, as at Longshot Ridge, or consist of both oxide and sulphide skarns as
at the Champion prospect, located midway between the Longshot Ridge and Copper
Queen prospects. At Copper Queen, the mineralization consists of copper sulphide
skarn and porphyry copper-molybdenum sulphide.

Contact metasomatic skarn (also known as tactite) typically
occurs in carbonate sedimentary rocks adjacent to small to moderate sized
intrusive rock bodies of intermediate composition, such as monzonite and
granodiorite. Heat and fluids from the intrusion recrystallize and alter the
carbonate rocks, converting limestone and limy sediments to higher temperature
calc-silicate minerals such as garnet, epidote, diopside, tremolite and calcite.
A variety of metalliferous deposits can be formed, including those that are
copper-rich, iron-rich or tungsten-rich.

Copper skarns often occur transitional to porphyry-type copper
deposits and are one of the worlds most abundant types of skarn deposits. Sizes
range from small up to 100 million tons or more with grades averaging 1 to 2%
Cu. Associated metallic minerals include chalcopyrite, bornite, magnetite,
specularite, pyrite, pyrrhotite, sphalerite, and molybdenite. Examples of copper
skarn deposits in the southwest US include Carr Fork (Utah), Santa Rita-Pinos
Altos (New Mexico), Mason Valley-Copper Canyon (Nevada) and Mission-Pima
(Arizona).

Porphyry-type copper-molybdenum deposits are closely associated
with and related to moderate sized intrusive rock bodies of intermediate to
felsic composition. Mineralization occurs as disseminated sulphides and as
crosscutting stockwork quartz-sulphide veins within the intrusive and extending
outward into the surrounding rocks. The intrusive bodies are commonly 0.5 to 2
kilometers or more across and their emplacement produces large volumes of
altered and intensely fractured ground.

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Porphyry-type deposits are classic large tonnage systems with
large metal contents amenable to low cost bulk mining methods, and these
deposits account for a major portion of the worlds copper and molybdenum
production. Sizes range from 20 million to several billion tons with grades
ranging from about 0.5% to 1.5% Cu. In the southwest US, one of the worlds
best-endowed copper provinces, a typical porphyry copper deposit contains 447
million tons of 0.67% Cu. Examples from this region include Silver Bell,
Yerington, Piedras Verdes and Sanchez.

Mineralization at New York Canyon Project

Mineralization at the New York Canyon Project consists of three
principal copper prospects along a west-northwest structural trend: Copper Queen
on the west, Champion in the center and Longshot Ridge on the east. The Copper
Queen prospect has no exposed mineralization at the surface but contains copper
sulfide skarn at depth and an incompletely confirmed copper-molybdenum sulphide
porphyry system at greater depth. The Champion and Longshot Ridge prospects,
however, have numerous widespread exposures of copper skarn mineralization, both
in surface outcrop and abundant old mine workings. The majority of recent
exploration efforts on the New York Canyon Project have focused on the extensive
oxide copper skarn mineralization at Longshot Ridge. This mineralization is the
subject of the current report.

The copper mineralization and associated alteration at Longshot
Ridge are products of an extensive copper-rich skarn system formed in
carbonaceous sediments of the Luning, Gabbs and Sunrise Formations. Small
amounts of copper occur also in stockwork veinlets in felsic porphyry intrusive
sills and dikes. The copper mineralization consists almost entirely of secondary
copper minerals, principally malachite, azurite, chrysocolla and copper wad, in
order of abundance. Additionally, some copper-rich limonite (goethite) has been
reported. The oxide copper minerals apparently are the products of supergene
weathering and oxidation of primary copper sulphide minerals present in the
original skarn. Because limestones tend to buffer any solution carrying copper
in the supergene environment, copper can be enriched as much as 300 to 400
percent by this supergene weathering process. Oxide copper deposits formed in a
similar manner in many copper districts throughout the southwest US, have
contributed substantially to the copper produced from the associated primary
copper deposits in these districts.

About 90 percent of the Longshot Ridge mineralization is within
the two upper units of the Gabbs Formation. Drilling reveals that the strongest,
thickest and most continuous mineralization occurs in a NE-trending zone, 200
feet wide by 1300 feet long, which is crossed by two NW-trending
structurally-controlled high grade zones, each about 100 feet wide and from 400
to 700 feet long.

Luning Formation  Dolomite and limestone units of the
Luning Formation are altered with the skarn minerals serpentine, talc, garnet,
magnetite and locally diopside. Serpentine and talc form sinuous veins along
structures in the dolomite, a diagnostic feature of dolomite skarns. Due to the
massive nature of the Luning, the skarn suite is confined mostly to small halos
along high-angle structures; for this reason, the copper mineralization is
limited in area but of moderately high grade. Additionally, the Luning contains
small local zones of hematite and dolomite with jasperoid veins a few feet
thick; these zones have fine-grained silica, hematite, goethite, limonite and
copper oxides. Historically, all the higher-grade copper shipped from the New
York Canyon area during World War I was from copper skarns in the Luning, not
from the Gabbs.

Gabbs Formation  Copper mineralization in the Gabbs is
much more widespread but lower grade than in the Luning. The vast majority of
the copper mineralization at Longshot Ridge is in the two upper units of the
Gabbs Formation, principally impure thin-bedded sandy limestone and siltstone.
The limestone is extensively altered to a skarn mineral suite of garnet,
diopside and magnetite; the siltstone is altered to hornfels. Due to the brittle
nature of diopside, the diopside-rich skarns are more abundantly fractured and
slightly rich in copper than the garnet-rich skarns. Typical Gabbs skarns are
only 5 to 15 feet thick, but there are many of them.

The lowest Gabbs unit, a carbonaceous bioclastic limestone
contains the boundary between marbleized limestone and calc-silica altered
limestone (the so-called marble line) but it rarely contains skarn
mineralization. It is cut by high-angle structures that were used as feeders for
the plentiful skarns and hornfels which formed in the more reactive or permeable
rocks of the two overlying Gabbs units. Granodiorite porphyry intrusions were
later emplaced as dikes along the same structures and as sills in the permeable
beds. The skarns are more commonly proximal to the sills.

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Sunrise Formation  The two lowest sedimentary units of
the Sunrise Formation, impure thin-bedded sandy limestone and siltstone, are
altered to a skarn suite of garnet, diopside and magnetite in the limestone and
to hornfels in the siltstone. As in the Gabbs, copper mineralization is
widespread but relatively low grade. However the Sunrise skarns are relatively
thick, on the order of 50 feet. The largest skarn bed is the Mayflower Mine,
which was mined on a fairly large scale. It is capped by hornfels-altered
sedimentary rocks

Current State of Exploration

We are continuing to pursue our 2007 exploration program on the
New York Canyon Project. No exploration results were received during the fourth
quarter ended June 30, 2007. The current work program for New York Canyon
Project comprises of drilling an initial 56 holes at Longshot Ridge to outline
the mineralized zone followed by 14 drill holes at Copper Queen to test the
mineralization at depth there. Geophysical surveys are intended to cover the
main areas of interest to develop further drill targets. Drilling to date at the
Longshot Ridge copper deposit has confirmed and expanded on the known extent of
the copper oxide mineralization, which is exposed at surface and has been tested
to depths up to 400 feet. With the exception of holes 06-13R and 06-14R, all
drill holes completed in 2006 have indicated the consistent and wide spread
nature of the copper mineralization at Longshot Ridge. The recent data is being
incorporated into the overall New York Canyon Project database in order to
develop a resource estimate of the copper content at Longshot Ridge.

Exploration work completed during the fiscal year ended June
30, 2007:

On October 18, 2006, we announced that nine new targets have
been identified from the geophysical surveys completed on the New York Canyon
Project. The 2006 geophysical survey program completed on the New York Canyon
Project consisted of a ground magnetic survey, an induced polarization ("IP")
survey, compilation and review of historic geophysical surveys and
interpretation that identified additional target areas for further drilling. A
134 line kilometre ground magnetics survey was completed by Magee Geophysical
Services LLC in March, 2006. Lines were oriented N15E, spaced 100 metres apart
and extend from the western side of the Copper Queen zone six kilometres to the
east to cover the Champion and Longshot Ridge zones. A 50.4 line kilometre
dipole-dipole IP survey was completed on 17 grid lines by Zonge Geosciences Inc.
Readings were taken at N=1 to 7 separations allowing an effective depth
penetration of approximately 400 metres. The lines were generally spaced at 100
metres except over areas of low magnetic response where the spacing was
increased to 200 or 400 metres. This IP survey provides expansive coverage over
the key mineralized areas and was of sufficient density to permit 3D inversion
imagery. Jim Wright of J.L. Wright Geophysics Inc. conducted the data
processing, inversion and interpretation of the geophysical data.

In his report, Mr. Wright notes that the historic gravity data
is important for constraining the western limits for exploration. Structures
interpreted from the gravity indicate multiple stepped faults that down drop
mineralized zones to the west. The magnetic survey outlines a number of possible
intrusive centers, including those that are associated with the Champion, Copper
Queen and Longshot Ridge mineralized zones. A substantial area measuring 1.9 km
by 1.3 km correlates well with the mapped skarn and intrusive rocks at Longshot
Ridge. Drilling to date on this zone has covered an approximate 450 metre by 600
metre area.

Mr. Wright notes that the mineralized zones and associated
magnetic high areas are relative chargeability lows surrounded by very large
chargeability high areas. Low resistivity has a direct correlation with all
mineralized zones and active magnetic areas. Through his compilation and
interpretation of the geophysical survey data, Mr. Wright developed target
criteria based upon geophysical characteristics. Based on these selection
criteria, nine target zones are identified that require follow up drill testing.
The targets show consistent line to line correlation with structures or magnetic
trends and are in areas that have not been previously drilled. Mr. Wright has
recommended 14 drill holes totalling 5,320 metres to test these target zones.
Our drilling has indicated that the mineralized systems have not as yet been
thoroughly evaluated and substantial drilling is required to outline the extent
of mineralization at Copper Queen, Champion and Longshot Ridge. The geophysical
surveys provide further evidence that these three key mineralized zones may form
part of the same system offset by basin and range structures and that there are
additional targets that require further evaluation.

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We contracted Leroy Kay Drilling of Yerington, Nevada to
provide core drilling services at the New York Canyon Project in 2006. Mr. Kay
has provided drilling services to us for the past two years and began core
drilling operations at the New York Canyon Project in early May, 2006. Drill
core is expected to allow thorough geological modelling of both the Longshot
Ridge Claims copper oxide skarn system and the Copper Queen Claims
copper-molybdenum porphyry mineralized area. Core samples will be used for
metallurgical testing in order to identify a beneficial copper extraction
technique in the oxide mineralized zones. Equipment and crew were mobilized to
the project site at the end of March, with drilling commencing April 3, 2006.
Drilling, grid work, geophysical surveys and permitting were ongoing during
April and continued to June, 2006.

The following results were received by Canyon during its fiscal
year end June 30, 2007 from re-analyses conducted on all pulps generated from
the 2006 drill program:

|Hole ID   | From(ft)               | To(ft) | Length(ft) | Copper(%)
|--------- | ---------------------- | ------ | ---------- | ---------
|06-11R*   | 0                      | 10     | 10         | 1.03     
|          | 55                     | 95     | 40         | 0.26     
|          | 195                    | 215    | 20         | 0.44     
|06-13R*   | No Significant Results |        |           
|06-14R*   | No Significant Results |        |           
|06-15R*   | 95                     | 135    | 40         | 0.39     
|06-20R*   | 85                     | 95     | 10         | 0.78     
|          | 125                    | 140    | 15         | 0.43     
|06-21C*   | 10                     | 125    | 115        | 0.54     
|including | 105                    | 125    | 20         | 1.03     
|06-22R*   | 0                      | 25     | 25         | 0.39     
|          | 55                     | 125    | 70         | 0.32     
|          | 295                    | 310    | 15         | 0.90     
|06-23C*   | 0                      | 45     | 45         | 0.35     
|          | 80                     | 310    | 230        | 0.78     
|including | 210                    | 270    | 60         | 1.72     
|06-24R*   | 30                     | 70     | 40         | 0.29     
|          | 95                     | 165    | 70         | 0.41     
|06-25R*   | 70                     | 180    | 110        | 0.47     
|including | 120                    | 150    | 30         | 0.96     
|          | 450                    | 485    | 35         | 0.34     
|06-26C*   | 20                     | 115    | 95         | 0.29     
|06-27R*   | 0                      | 70     | 70         | 0.16     
|including | 55                     | 70     | 15         | 0.37     
|          | 290                    | 330    | 40         | 0.23     
|06-28R*   | 0                      | 185    | 185        | 0.53     
|including | 35                     | 85     | 50         | 1.08     
|06-29C*   | 10                     | 45     | 35         | 0.28     
|06-30R*   | 0                      | 50     | 50         | 0.23     
|          | 120                    | 225    | 105        | 0.28     
|including | 120                    | 170    | 50         | 0.45     
|06-31R*   | 0                      | 130    | 130        | 0.32     
|          | 190                    | 380    | 190        | 0.87     
|including | 285                    | 375    | 90         | 1.06     
|06-32C*   | 65                     | 148    | 83         | 0.66     
|including | 110                    | 148    | 38         | 1.09     
|06-33C*   | 10                     | 200    | 190        | 0.52     
|including | 60                     | 95     | 35         | 0.84     

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|Hole ID | From(ft) | To(ft) | Length(ft) | Copper(%)
|------- | -------- | ------ | ---------- | ---------
|        | 175      | 195    | 20         | 1.50     

Notes*
Reverse Circulation holes are designated R and diamond drill core holes are
designated C.

The analyses of total copper content reported were completed by
ALS Chemex using their AA62 atomic absorption procedure. A thorough quality
assurance/quality control protocol of certified standard reference materials,
duplicates and blanks was conducted during the analytical process.

Core hole 06-23C returned an average of 0.78% copper over a 230
foot interval starting from 80 feet. Included in this interval is a 60 foot
section that averaged 1.72% copper from 210 to 270 feet. An upper interval from
surface to 45 feet intersected 0.35% copper. RC drill 06-11R was drilled
vertically to a depth of 265 feet. As shown in the table above, three
mineralized horizons were encountered starting from surface to a depth of 215
feet within skarn altered siltstone varying from 0.26% copper over 40 feet to
1.03% copper over 10 feet. Drill holes 06-13R and 06-14R were both drilled
vertically to depths of 365 feet and 350 feet respectively. These holes are
located in the south-western area of Longshot Ridge within variably skarn
altered siltstone. These holes, spaced approximately 120 feet apart, did not
return any significant copper mineralization and may define the near surface
limit of mineralization in this direction.

Hole 06-15R, located in the south central area of Longshot
Ridge, returned an average of 0.39% copper over a 35 foot interval from 95 to
130 feet. Hole 06-20R was drilled in the south central portion of Longshot
Ridge. This vertical hole returned an average of 0.80% copper over a 10 foot
interval from 85 to 95 feet from within skarn altered marble and a 15 foot
interval from 125 feet that averaged 0.43% copper in altered siltstone. Core
hole 06-21C is located in the northwest area of Longshot Ridge. This vertical
drill hole returned 0.54% copper over a 115 foot interval starting at 10 feet,
including 1.03% copper over 20 feet from 105 to 125 feet. Hole 06-22R is located
in the central portion of Longshot Ridge and intersected three mineralized
horizons as shown in the table above, including 0.90% copper over 15 feet
starting at 295 feet. Hole 06-24R is located in the south central portion of the
Longshot Ridge deposit and returned an average of 0.29% copper over 40 feet
starting at 30 feet depth and a 70 foot interval averaging 0.41% copper starting
at 95 feet.

Hole 06-25R was drilled from the same setup as 06-24R and
oriented towards the northwest at a 60 degree angle to a depth of 600 feet. The
hole returned 0.47% copper over a 110 foot interval starting at 70 feet,
including a 30 foot interval from 120 feet that averaged 0.96% copper. A further
35 foot interval from 450 feet returned an average of 0.34% copper. Drill hole
06-26C is located in the north east portion of Longshot Ridge and was drilled
vertically to a depth of 534 feet. Drilling intersected weak skarn alteration in
siltstone and limestone of the Gabbs Formation overlying Luning Formation
limestone. The hole intersected weak to moderate copper mineralization from the
start of sampling at 20 feet to 115 feet and averaged 0.29% Cu over this 95 foot
distance. Copper mineralization in nearby outcrop indicates that the
mineralization extends from surface.

06-27R is located in the central west edge of the tested limit
of Longshot Ridge and was drilled vertically to a depth of 335 feet.
Mineralization is hosted within variable skarn alteration in siltstone and
limestone. Sampling returned a 15 foot interval from 55 to 70 feet that averaged
0.37% Cu and a 40 foot interval further down the hole from 290 to 330 feet that
averaged 0.23% Cu. 06-28R is located 300 feet northwest of 06-27R within a zone
of strong skarn alteration of siltstone and limestone within the Gabbs Fm. The
hole was drilled vertically to a depth of 345 feet and is the most westerly
located hole drilled to date on Longshot Ridge. Surface workings indicate that
mineralization extends at least 300 feet further west. Hole 06-28R returned a
broad zone of copper mineralization extending from surface to 185 feet that
averaged 0.53% Cu and included a strong zone of mineralization extending from 35
feet to 85 feet that averaged 1.08% Cu.

06-29C is located in the northern end of Longshot Ridge and was
drilled vertically to a depth of 500 feet. The hole intersected the Luning
Formation limestone unit that was non to weakly altered. An interval from the
start of sampling at 10 feet to 45 feet averaged 0.28% Cu. 06-30R is located 260
feet southwest of 06-29C and was drilled vertically to a depth of 225 feet.
Copper mineralization is hosted within calc-silicate and skarn altered limestone
adjacent to quartz monzonite sills. An interval from surface to 50 feet averaged
0.23% Cu and a second interval from 120 to 225 feet averaged 0.28% Cu. The
mineralization remains open to the north, west and at depth.

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06-31R is located in the west central area of Longshot Ridge.
The hole was angled to the northwest at a dip of 600 to a depth of
545 feet. The hole intersected moderate skarn alteration within siltstone and
limestone of the Gabbs Fm. Mineralization extends from surface to 380 feet with
an upper 130 foot zone averaging 0.32% Cu and a lower 190 foot zone starting at
190 feet that averages 0.87% Cu. Included within this interval is a 90 foot zone
extending from 285 feet that averages 1.06% Cu. 06-32C is located at the
northern portion of Longshot Ridge. The hole was drilled northwest across
stratigraphy at an angle of 700 to a depth of 284 feet. An 83 foot
interval starting at 65 feet returned an average of 0.66% Cu.

06-33C is located in north central Longshot Ridge,
approximately 350 feet south of 06-32C. The hole was drilled towards the
northwest at an angle of 70° to a depth of 345 feet. A 190 foot zone
from the start of sampling at 10 feet to 200 feet averaged 0.52% Cu, with a 20
foot zone from 175 to 195 feet averaging 1.50% Cu.

Drilling to date at the Longshot Ridge copper deposit has
confirmed and expanded on the known extent of the copper oxide mineralization,
which is exposed at surface and has been tested to depths up to 400 feet. With
the exception of holes 06-13R and 06-14R, all drill holes completed in 2006 have
indicated the consistent and wide spread nature of the copper mineralization at
Longshot Ridge. The recent data is being incorporated into the overall New York
Canyon project database in order to develop a resource estimate of the copper
content at Longshot Ridge.

|ITEM 3. | LEGAL PROCEEDINGS.
|------- | ------------------

On May 25, 2005, the United States Securities and Exchange
Commission (the SEC) issued a formal order of private investigation to Canyon
Copper Corp. (formerly Aberdene Mines Limited). In connection with the
investigation order, we received subpoenas from the SEC requesting the
production of certain of our documents, relating to, among other things, our
transactions with Langley Park, PLC and the principals of Langley Park, PLC,
certain of our news releases and certain materials sent to our stockholders. We
have since received additional document production orders from the SEC. We have
complied with all document requests and are voluntarily complying with the
investigation. We have also responded to any informal requests for information
from the SEC.

On December 20, 2005, the British Columbia Securities Commission
  (the BCSC) issued a formal investigation order to Canyon Copper
  and certain of our former officers pursuant to the Securities Act of British
  Columbia in connection with certain news releases and materials sent to our
  stockholders in 2004. We are cooperating fully with the BCSC inquiry and have
  submitted all requested documents in connection with the investigation to date.
  Effective July 31, 2007, the BCSC and Robert Weicker, a former officer and former
  member of our Board of Directors, reached a settlement agreement pursuant to
  which Mr. Weicker agreed to pay a fine of CDN$30,000 and agreed to not prepare
  or disseminate news releases containing scientific or technical information
  for any issuer, except under the supervision of a director or officer of the
  issuer, for 12 months from the date of the settlement agreement.

On January 29, 2007, we received a statement of claim filed in
  the Ontario Superior Court of Justice from a company claiming unpaid investor
  relations fees of $25,916 and requesting the balance of an alleged retainer
  of $84,000. Canyon is vigorously disputing this claim and believes this action
  is without merit.

|ITEM 4. | SUBMISSION OF MATTERS TO A VOTE OF SECURITY
      HOLDERS.
|------- | ----------------------------------------------------------

None.

17

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PART II

|ITEM 5. | MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER
      MATTERS AND **SMALL BUSINESS ISSUER PRUCHASES OF EQUITY
      SECURITIES.**
|------- | ----------------------------------------------------------------------------------------------------------------------------------

Our shares are currently trading on the Over-The-Counter
Bulletin Board (the OTC Bulletin Board) under the symbol CYOO. The high and
the low bid prices for our shares for the last two fiscal years of actual
trading, as quoted in the OTC Bulletin Board, as applicable, were:

QUARTER
    HIGH ($)
    LOW ($)1stQuarter 2006
    0.53
    0.1852ndQuarter 2006
    0.42
    0.293rdQuarter 2006
    0.79
    0.4454thQuarter 2006
    0.75
    0.381stQuarter 2007
    0.60
    0.282ndQuarter 2007
    0.34
    0.213rdQuarter 2007
    0.355
    0.244thQuarter 2007
    0.37
    0.28


The trades reflect inter-dealer prices, without retail mark-up,
markdown or commission and may not represent actual transactions.

Holders of Our Common Stock

As of June 30, 2007, we had 77 registered stockholders holding
  70,781,399 of our issued and outstanding common stock.

Dividends

There are no restrictions in our Articles of Incorporation or
Bylaws that prevent us from declaring dividends. Our governing status, Chapter
78 of the Nevada Revised Statutes, however, do prohibit us from declaring
dividends where, after giving effect to the distribution of the dividend:

| | 1. | We would not be able to pay our debts as they become due
      in the usual course of business; or                                                                                                                                          
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                             
| | 2. | Our total assets would be less than the sum of our total
      liabilities plus the amount that would be needed to satisfy the rights of
      stockholders who have preferential rights superior to those receiving the
      distribution.

We have not declared any dividends and we do not plan to
declare any dividends in the foreseeable future.

RECENT SALES OF UNREGISTERED SECURITIES

All unregistered sales of our equity securities made during the
fiscal year ended June 30, 2007 have been previously reported in our Quarterly
Reports on Form 10-QSB and our Current Reports on Form 8-K.

PURCHASES OF EQUITY SECURITIES

None.

18

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|ITEM 6. | MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN
      OF OPERATION.
|------- | ----------------------------------------------------------------

Plan Of Operation

Our plan of operation for the next twelve months is to continue
our initial exploration activities of the New York Canyon Project in Nevada.

Our estimated expenses for the next twelve months are as
follows:

|                                                            |   | 12 Month Total Budget | 
|----------------------------------------------------------- | - | --------------------- | 
|ITEM AND ACTIVITY                                           |   |                       | 
|                                                            |   |                       | 
|LAND STATUS                                                 |   |                       | 
|2007 - 2008 claim maintenance fees                          | $ | 175,000               | 
|Monthly Payments - Patents                                  |   | 45,000                | 
|PERMITTING                                                  |   |                       | 
|Road and drill site work                                    |   | 50,000                | 
|Archeological and biological surveys                        |   | 20,000                | 
|Water quality monitoring                                    |   | 20,000                | 
|Drill Permitting & Bonding                                  |   | 100,000               | 
|Reclamation                                                 |   | 20,000                | 
|                                                            |   |                       | 
|DRILL PROGRAM                                               |   |                       | 
|(includes assays &
      supervision)                       |   |                       | 
|Compile data for engineering evaluation                     |   | 60,000                | 
|Drilling RC                                                 |   | 900,000               | 
|Drilling Core                                               |   | 600,000               | 
|                                                            |   |                       | 
|METALLURGICAL PROGRAM                                       |   |                       | 
|Investigation into acid costs, sites,
      transport, etc. |   | -                     | 
|Preliminary metallurgical work                              |   | 105,000               | 
|Preliminary alternative leach studies                       |   | 150,000               | 
|ENGINEERING & REPORTING                                     |   |                       | 
|Engineering 43-101 Report                                   |   | 20,000                | 
|Modeling, Scoping study                                     |   | 50,000                | 
|GEOPHYSICAL SURVEYS                                         |   |                       | 
|Induced polarization                                        |   | 70,000                | 
|Airborne radiometric survey                                 |   | 65,000                | 
|GEOLOGICAL MAPPING AND INVESTIGATIONS                       |   |                       | 
|Mapping and sampling                                        |   | 50,000                | 
|Contingency 10%                                             |   | 250,000               | 
|Management fee 5%                                           |   | 125,000               | 
|TOTAL                                                       | $ | 2,875,000             | 

Our plan of operation calls for significant expenses in
connection with the exploration of the New York Canyon Project and requires us
to obtain additional financing. We recorded a net loss of $2,177,278 for the
year ended June 30, 2007 and have an accumulated deficit of $15,859,968 since
inception. As at June 30, 2007, we had cash of $34,401 and, for the next twelve
months, management anticipates that the minimum cash requirements to fund our
proposed exploration program and our continued operations will be $2,875,000.
Accordingly we do not have sufficient funds to meet our planned expenditures
over the next twelve months and will need to seek additional financing to meet
our planned expenditures.

We have not had revenues since inception. We are currently
seeking to identify sources of additional financing. However, there is no
assurance we will be successful in raising the necessary funding or on terms

19

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that are acceptable to us. Since inception, we have been
dependent on investment capital and debt financing from third parties as our
primary source of liquidity. We anticipate continuing to rely on equity sales of
shares of our common stock and loans in order to continue to fund our business
operations. Issuances of additional shares will result in further dilution of
our existing shareholders. See Future Financings, below.

RESULTS OF OPERATIONS

|Summary of Year End Results |   |                    |   |   |            |   |  |                     | 
|--------------------------- | - | ------------------ | - | - | ---------- | - |  | ------------------- | 
|                            |   | Year Ended June 30 |  
|                            |   | 2007               |   |   | 2006       |   |  | Percentage          | 
|                            |   |                    |   |   |            |   |  | Increase / Decrease | 
|Revenue                     | $ | -                  |   | $ | -          |   |  | n/a                 | 
|Operating Expenses          |   | (1,617,880         | ) |   | (7,232,219 | ) |  | (78)%               | 
|Other Income (Expense)      |   | (559,398           | ) |   | (459,918   | ) |  | 220%                | 
|Net Income (Loss)           | $ | (2,177,278         | ) | $ | (7,692,137 | ) |  | (72)%               | 

Revenue

We have not earned any revenues to date and do not anticipate
earning revenues until such time as we enter into commercial production of our
mineral properties. There can be no assurance that we will be successful in
discovering commercial quantities or that we can commercially produce metals or
minerals. We are presently an exploration stage company engaged in the search
for mineral reserves. We can provide no assurances that we will be able to
discover any commercially exploitable levels of mineral resources on our
property, or, even if such resources are discovered, that we will be able to
enter into commercial production of our mineral property.

Expenses

The major components of our expenses for the year are outlined
in the table below:

|                                                |   | Year Ended June 30 | 
|----------------------------------------------- | - | ------------------ | 
|                                                |   |                    | 
|                                                |   | 2007               | 
|                                                |   |                    | 
|Operating expenses:                             |   |                    | 
|Depreciation                                    | $ | -                  | 
|Foreign exchange loss (gain)                    |   | 8,448              | 
|General and administrative                      |   | 638,380            | 
|Impairment of mineral property costs            |   | 477,588            | 
|Impairment loss on equipment                    |   | 10,811             | 
|Mineral exploration costs                       |   | 482,653            | 
|Sub-total                                       | $ | 1,617,880          | 
|Other expenses:                                 |   |                    | 
|Accretion of discounts on convertible debt      | $ | 235,633            | 
|(Gain) loss on settlement of related party debt |   | -                  | 
|Interest expense                                |   | 103,353            | 

20

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|                                            |   | Year Ended June 30 | 
|------------------------------------------- | - | ------------------ | 
|                                            |   |                    | 
|                                            |   | 2007               | 
|                                            |   |                    | 
|Impairment loss on investment securities    |   | 224,053            | 
|Loss on sale of investment securities       |   | -                  | 
|Gain on change in fair values of beneficial |   | 3,641              | 
|conversion features                         |   |                    | 
|Sub-total                                   | $ | 559,398            | 
|Total Expenses                              | $ | 2,177,278          | 

We incurred operating expenses in the amount of $1,617,880 for
  the fiscal year ended June 30, 2007 as compared to $7,232,219 for the fiscal
  year ended June 30, 2006. The decrease in operating expenditures for 2007 as
  compared with 2006 is primarily attributable to decreased costs associated mineral
  exploration costs and decreased general and administrative expenditures. We
  anticipate that the expenses will increase over the next twelve months due to
  our ongoing planned exploration activities on the New York Canyon Project.

During the year ended June 30, 2007, we recognized an
impairment loss of $224,503 on our 1,027,974 Langley Park shares.

LIQUIDITY AND FINANCIAL CONDITION

|Working Capital                   |   |               |   |   |                  |   |  |                           | 
|--------------------------------- | - | ------------- | - | - | ---------------- | - |  | ------------------------- | 
|                                  |   |               |   |   |                  |   |  | Percentage                | 
|                                  |   | At June, 2007 |   |   | At June 30, 2006 |   |  | Increase
      / Decrease | 
|Current Assets                    | $ | 50,324        |   | $ | 393,165          |   |  | (87.2 )%                  | 
|Current Liabilities               |   | (1,140,201    | ) |   | (892,808         | ) |  | 27.7%                     | 
|Working Capital Surplus (Deficit) | $ | (1,089,877    | ) | $ | (499,643         | ) |  | 118.1%                    | 

|Cash Flows                                    |   |                     |   |   |                     |  
|--------------------------------------------- | - | ------------------- | - | - | ------------------- | -
|                                              |   | Year Ended          |   |   | Year Ended          |  
|                                              |   | June
      30, 2007 |   |   | June
      30, 2006 |  
|Cash Flows used in Operating Activities       | $ | (1,274,264          | ) | $ | (3,146,899          | )
|Cash Flows used in Investing Activities       |   | (293,138            | ) |   | (81,999             | )
|Cash Flows provided by Financing Activities   |   | 1,462,053           |   |   | 3,319,832           |  
|Net Increase (decrease) in Cash During Period | $ | (105,349            | ) | $ | 90,934              |  

Working Capital.The increase in our working capital
deficit from $499,643 as at June 30, 2006 to a working capital deficit of
$1,089,877 as at June 30, 2007 was primarily a result of our inability to obtain
sufficient financing to fund our planned mineral exploration program. During the
year ended June 30, 2007 we raised $1,462,053 from debt and equity financings to
fund our final payment of our option to acquire the New York Canyon Project,
repayment of debt, to fund our exploration work program and for general and
administrative expenses.

15% Convertible Notes.On August 16, 2006, we received
  loans totalling an aggregate of $187,607 from five individuals as evidenced
  by unsecured promissory notes. Each note bears interest at a rate of 15% per

21

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annum and was due on October 30, 2006. We were also required to
pay a 7.5% administration fee on the principal amount of each of the notes. On
October 31, 2006 we repaid $67,496 of the loans and renewed $114,983 of the
loans. The remaining notes continued to bear interest at a rate of 15% per annum
and were due on January 14, 2007. On January 14, 2007, we repaid $96,653 and
renewed $23,509 of the loans. Pursuant to the renewals, we are also required to
pay a 7.5% administration fee on the principal amount of each of the notes.

On November 7, 2006, we received loans totalling an aggregate
of $64,355 evidenced by unsecured promissory notes. Each note bears interest at
a rate of 15% per annum and was due on January 21, 2007. On January 21, 2007, we
repaid the loans. We were also required to pay a 7.5% administration fee on the
principal amount of each of the notes.

On April 12, 2007 and April 11, 2007, we entered into amendments
  to our loan agreement dated September 12, 2006 and September 11, 2006, respectively,
  with Aton Ventures Fund Ltd. (“AVF”) and Asset Protection Fund Ltd.
  (“APF”) (together the “Lenders”) whereby the Lenders
  loaned $500,000 to us. Under the terms of the amendment agreements, AVF agreed
  to extend the maturity date of its loan to October 12, 2007 and APF agreed to
  extend the maturity date of its loan to October 11, 2007. The loans are evidence
  by unsecured convertible promissory notes. The loans bear an interest rate of
  8% per annum. Each of the loans are convertible at the option of the lender
  at any time prior to maturity into shares of Canyon at a price of the lesser
  of $0.30 per share or the closing price of Canyon’s shares on the OTC
  Bulletin Board on the business day preceding the date the lender provides notice
  of conversion. Upon exercise of conversion rights of the lender, the lender
  shall receive for no additional consideration one half of a share purchase warrant
  for each share issued by Canyon to the lender. Each whole warrant will entitle
  the lender to purchase one additional share of our common stock for a period
  of one year from the date of issuance at a price of $0.40. To June 30, 2007,
  we accreted interest expense of $71,766 increasing the carrying value of the
  convertible debentures to $500,000.

On April 25, 2007, we entered into a loan agreement with Aton
Select Fund Limited pursuant to which we received a loan of $120,000 from ASF.
The loan is evidenced by an unsecured convertible promissory note. The loan
bears interest at a rate of 15% per annum and matures on March 20, 2008. Also on
April 25, 2007 we entered into two loan agreements with Anthony Harvey, our
Chief Executive Officer and a member of our Board of Directors, pursuant to
which we received loans of US$100,000 and CDN$50,000. The loans are evidenced by
an unsecured convertible promissory note. The loans bear interest at a rate of
15% per annum and mature on March 14, 2008 and April 25, 2008, respectively.
Each of the loans is convertible at the option of the lender at any time prior
to maturity into units of Canyon at a price of $0.30 per unit, with each unit
consisting of one share of our common stock and one share purchase warrant. Each
warrant will entitle the lender to purchase an additional share of Canyons
common stock at a price of $0.35 per share for a period of two years from the
date of issuance of the units.

Future Financings

Our plan of operation calls for significant expenses in
connection with the exploration of the New York Canyon Project and requires us
to obtain additional financing. We recorded a net loss of $2,177,278 for the
year ended June 30, 2007 and have an accumulated deficit of $15,859,968 since
inception. As at June 30, 2007 we had cash of $34,401 and, for the next twelve
months, management anticipates that the minimum cash requirements to fund our
proposed exploration program and our continued operations will be $2,875,000.
Accordingly we do not have sufficient funds to meet our planned expenditures
over the next twelve months and will need to seek additional financing to meet
our planned expenditures. There is no assurance that we will be able to obtain
additional financing in the future.

On March 29, 2007, we entered into an engagement letter with
Union Securities Ltd. (Union) pursuant to which Union agreed to act as our
sponsor in connection with a proposed listing of our common stock on a Canadian
stock exchange and to act as our agent for a proposed equity offering of a
minimum of $6,000,000 and a maximum of $12,000,000 in units to non-US residents
pursuant to Regulation S. Each unit is expected to consist of one common share
and one share purchase warrant to purchase an additional common share at a price
to be determined for a period of 18 months from the closing of the offering. We
have agreed to pay Union a sponsorship fee of $25,000 (which fee has been paid),
a cash commission equal to 8% of the proceeds received from units sold and
options to acquire additional shares of our common stock equal to 10% of the
number of units sold. As a condition of the engagement letter, on or before the
closing of the

22

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offering, we must provide Union with a copy of our final
listing application and the conditional listing approval of the Canadian stock
exchange.

On August 1, 2007, we approved an offering on a private
placement basis of up to 2,000,000 units at a price of $0.25 per unit pursuant
to Regulation S of the Securities Act. Each unit consists of one share of the
Corporations common stock and one share purchase warrant, each warrant
entitling the holder thereof to purchase an additional share of our common stock
for a period of one year from the date of issuance at an exercise price of $0.30
per share. On August 15, 2007, we issued 1,200,000 units to one subscriber. The
balance of the offering has not been closed and there is no assurance that the
remaining units will be sold.

Obtaining additional financing is subject to a number of
factors, including the market prices for the mineral property and copper and our
proposed listing of our common stock on a Canadian stock exchange. These factors
may make the timing, amount, terms or conditions of additional financing
unavailable to us. Since our inception, we have used our common stock to raise
money for our operations and for our property acquisitions. We have not attained
profitable operations and are dependent upon obtaining financing to pursue our
plan of operation. For these reasons, our independent auditors believe there
exists a substantial doubt about our ability to continue as a going concern.

OFF-BALANCE SHEET ARRANGEMENTS

None.

CRITICAL ACCOUNTING POLICIES

We have identified certain accounting policies, described
below, that are the most important to the portrayal of our current financial
condition and results of operations.

Use of Estimates

The preparation of financial statements in accordance with
United States generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts of assets and
liabilities at the date of the financial statements and the reported amounts of
revenue and expenses in the reporting period. We regularly evaluate estimates
and assumptions related to long-lived assets, derivative liabilities, asset
retirement obligations, stock-based compensation and deferred income tax asset
valuations. We base our estimates and assumptions on current facts, historical
experience and various other factors that it believes to be reasonable under the
circumstances, the results of which form the basis for making judgments about
the carrying values of assets and liabilities and the accrual of costs and
expenses that are not readily apparent from other sources. The actual results
experienced by us may differ materially and adversely from our estimates. To the
extent there are material differences between the estimates and the actual
results, future results of operations will be affected.

Investment Securities

We report investments in debt and marketable equity securities
at fair value based on quoted market prices or, if quoted prices are not
available, discounted expected cash flows using market rates commensurate with
credit quality and maturity of the investment. All investment securities are
designated as available for sale with unrealized gains and losses included in
stockholders' equity. We regularly review investment securities for impairment
based on criteria that include the extent to which the investment's carrying
value exceeds its related market value, the duration of the market decline, our
ability to hold to recovery and the financial strength and specific prospects of
the issuer of the security. Unrealized losses that are other than temporary are
recognized in earnings. Realized gains and losses are accounted for on the
specific identification method.

We periodically review these investments for
other-than-temporary declines in fair value based on the specific identification
method and writes down investments to their fair value when an
other-than-temporary decline has occurred. When determining whether a decline is
other-than-temporary, we examine (i) the length of time and the extent to which
the fair value of an investment has been lower than its carrying value: (ii) the
financial condition and near-term prospects of the investee, including any
specific events that may influence the operations of the investee such as
changes in technology that may impair the earnings potential of the

23

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investee: and (iii) our intent and ability to retain its
investment in the investee for a sufficient period of time to allow for any
anticipated recovery in market value. We generally believe that an
other-than-temporary decline has occurred when the fair value of the investment
is below the carrying value for one year, absent of evidence to the
contrary.

Mineral Property Costs

We have been in the exploration stage since its inception on
January 21, 2000, and have not yet realized any revenues from our planned
operations. We are primarily engaged in the acquisition and exploration of
mining properties. Mineral property exploration costs are expensed as incurred.
Mineral property acquisition costs are initially capitalized when incurred using
the guidance in EITF 04-02, Whether Mineral Rights Are Tangible or
Intangible Assets. We assess the carrying costs for impairment under SFAS
144, Accounting for Impairment or Disposal of Long Lived Assets at each fiscal
quarter end. When it has been determined that a mineral property can be
economically developed as a result of establishing proven and probable reserves,
the costs then incurred to develop such property, are capitalized. Such costs
will be amortized using the units-of-production method over the estimated life
of the probable reserve. If mineral properties are subsequently abandoned or
impaired, any capitalized costs will be charged to operations.

Stock-based Compensation

Prior to January 1, 2006, we accounted for stock-based awards
under the recognition and measurement provisions of Accounting Principles Board
Opinion (APB) No. 25, Accounting for Stock Issued to Employees using the
intrinsic value method of accounting, under which compensation expense was only
recognized if the exercise price of our employee stock options was less than the
market price of the underlying common stock on the date of grant. Effective
January 1, 2006, we adopted the fair value recognition provisions of SFAS No.
123R Share Based Payments, using the modified prospective transition method.
Under that transition method, compensation cost is recognized for all
share-based payments granted prior to, but not yet vested as of January 1, 2006,
based on the grant date fair value estimated in accordance with the original
provisions of SFAS No. 123, and compensation cost for all share-based payments
granted subsequent to January 1, 2006, based on the grant-date fair value
estimated in accordance with the provisions of SFAS 123R. Results for prior
periods have not been restated. There was no effect on our loss from operations,
cash flows or loss per share as a result of adopting SFAS No. 123R.

All transactions in which goods or services are the
consideration received for the issuance of equity instruments are accounted for
based on the fair value of the consideration received or the fair value of the
equity instrument issued, whichever is more reliably measurable. Equity
instruments issued to employees and the cost of the services received as
consideration are measured and recognized based on the fair value of the equity
instruments issued.

RISKS AND UNCERTAINTIES

If we do not obtain additional financing, our business will
fail.

Our current operating funds are inadequate to complete our
planned exploration of the New York Canyon Project and our general and
administrative expenses. Our business plan calls for significant expenses in
connection with the exploration and development of those mineral claims. As a
result, we will require additional financing to complete our exploration and
development plans. We will also require additional financing if the costs of
exploration are greater than anticipated and to sustain our business operations
if we are not successful in earning revenues once exploration is complete.
Obtaining additional financing would be subject to a number of factors, the
known material factors being market prices for copper, investor acceptance of
our mineral claims, and investor sentiment. These factors may make the timing,
amount, terms or conditions of additional financing unavailable to us.

If we complete a financing through the sale of additional
shares of our common stock, shareholders will experience dilution.

The most likely source of future financing presently available
to us is through the issuance of our common stock. Any sale of share capital
will result in dilution to existing shareholders. The only other anticipated

24

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alternative for the financing of further exploration would be
the offering by us of an interest in our properties to be earned by another
party or parties carrying out further exploration thereof, which is not
presently contemplated.

In order to maintain our rights to the New York Canyon
Project, we will be required to make annual filings with federal and state
regulatory agencies and/or be required to complete assessment work on the New
York Canyon Project.

In order to maintain our rights to the New York Canyon Project,
we will be required to make annual filings with federal and state regulatory
authorities. Currently the amount of these fees is nominal; however, these
maintenance fees are subject to adjustment. In addition, we may be required by
federal and/or state legislation or regulations to complete minimum annual
amounts of mineral exploration work on the New York Canyon Project. A failure by
us to meet the annual maintenance requirements under federal and state laws
could cause our rights to the New York Canyon Project to lapse.

We lack an operating history and have losses which we expect
to continue into the future. As a result, we may have to suspend or cease
exploration activities and if we do not obtain additional financing, our
business will fail.

We were incorporated on January 21, 2000 and to date have been
involved primarily in organizational activities, the acquisition of mineral
claims and the exploration and development on these claims. We have no
exploration history upon which an evaluation of our future success or failure
can be made. Our ability to achieve and maintain profitability and positive cash
flow is dependent upon:

- our ability to locate a profitable mineral property; and
- our ability to generate revenues.

Our plan of operation calls for significant expenses in
connection with the exploration of the New York Canyon Project, which will
require us to obtain additional financing. We recorded a net loss of $2,177,278
for the year ended June 30, 2007 and have an accumulated deficit of $15,859,968
since inception. As at June 30, 2007 we had cash of $34,401 and for the next
twelve months, management anticipates that the minimum cash requirements to fund
our proposed exploration program and our continued operations will be
$2,875,000. Accordingly we do not have sufficient funds to meet our planned
expenditures over the next twelve months and will need to seek additional
financing to meet our planned expenditures.

Obtaining additional financing would be subject to a number of
factors, including the market prices for the mineral property and base and
precious metals. These factors may make the timing, amount, terms or conditions
of additional financing unavailable to us. Since our inception, we have used our
common stock to raise money for our operations and for our property
acquisitions. We have not attained profitable operations and are dependent upon
obtaining financing to pursue our plan of operation. For these reasons, our
independent auditors believe there exists a substantial doubt about our ability
to continue as a going concern.

Because we have not commenced business operations, we face a
high risk of business failure.

We have not earned any revenues as of the date of this Annual
Report. Potential investors should be aware of the difficulties normally
encountered by new mineral exploration companies and the high rate of failure of
such enterprises. The likelihood of success must be considered in light of the
problems, expenses, difficulties, complications and delays encountered in
connection with the exploration of the mineral properties that we plan to
undertake. These potential problems include, but are not limited to,
unanticipated problems relating to exploration, and additional costs and
expenses that may exceed current estimates.

We have no known mineral reserves and if we cannot find any,
we will have to cease operations.

We have no mineral reserves. Mineral exploration is highly
speculative. It involves many risks and is often non-productive. Even if we are
able to find mineral reserves on our property our production capability is
subject to further risks including:

- Costs of bringing the property into production including exploration work,
  preparation of production

25

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- Availability and costs of financing;
- Ongoing costs of production; and
- Environmental compliance regulations and restraints.

The marketability of any minerals acquired or discovered may be
affected by numerous factors which are beyond our control and which cannot be
accurately predicted, such as market fluctuations, the lack of milling
facilities and processing equipment near the New York Canyon Project and such
other factors as government regulations, including regulations relating to
allowable production, exporting of minerals, and environmental protection. If we
do not find a mineral reserve or define a mineral inventory containing gold,
silver, copper, zinc or iron or if we cannot explore the mineral reserve, either
because we do not have the money to do it or because it will not be economically
feasible to do it, we will have to cease operations and you will lose your
investment.

Because we anticipate our operating expenses will increase
prior to our earning revenues, we may never achieve profitability.

Prior to completion of our exploration stage, we anticipate
that we will incur increased operating expenses without realizing any revenues.
We therefore expect to incur significant losses into the foreseeable future. We
recognize that if we are unable to generate significant revenues from the
exploration of our mineral claims and the production of minerals thereon, if
any, we will not be able to earn profits or continue operations. There is no
history upon which to base any assumption as to the likelihood that we will
prove successful, and we may not be able to ever generate any operating revenues
or achieve profitable operations. If we are unsuccessful in addressing these
risks, our business will most likely fail.

Because of the inherent dangers involved in mineral
exploration, there is a risk that we may incur liability or damages if and when
we conduct mineral exploration activities.

The search for valuable minerals involves numerous hazards. As
a result, if and when we conduct exploration activities we may become subject to
liability for such hazards, including pollution, cave-ins and other hazards
against which we cannot insure or against which we may elect not to insure. The
payment of such liabilities may have a material adverse effect on our financial
position.

If the price of base and precious metals declines, our
financial condition and ability to obtain future financings will be
impaired.

The price of base and precious metals is affected by numerous
factors, all of which are beyond our control. Factors that tend to cause the
price of base and precious metals to decrease include the following:

| | (a) | Sales or leasing of base and precious metals by
      governments and central banks;                                                                                                                                      
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                           
| | (b) | A low rate of inflation and a strong US dollar;                                                                                                                                                                           
| |     |                                                                                                                                                                                                                           
| | (c) | Speculative trading;                                                                                                                                                                                                      
| |     |                                                                                                                                                                                                                           
| | (d) | Decreased demand for base and precious metals industrial,
      jewelry and investment uses;                                                                                                                              
| |     |                                                                                                                                                                                                                           
| | (e) | High supply of base and precious metals from production,
      disinvestment, scrap and hedging;                                                                                                                          
| |     |                                                                                                                                                                                                                           
| | (f) | Sales by base and precious metals producers and foreign
      transactions and other hedging transactions; and                                                                                                            
| |     |                                                                                                                                                                                                                           
| | (g) | Devaluing local currencies (relative to base and precious
      metals price in US dollars) leading to lower production costs and higher
      production in certain major base and precious metals producing
    regions.

Our business is dependent on the price of base and precious
metals. We have not undertaken hedging transactions in order to protect us from
a decline in the price of base and precious metals. A decline in the

26

---

price of base and precious metals may also decrease our ability
to obtain future financings to fund our planned development and exploration
programs.

Because we are an exploration stage company, our business
has a high risk of failure.

As noted in the financial statements that are included with
this Annual Report, we are an exploration stage company that has incurred net
losses since inception, we have not attained profitable operations and we are
dependent upon obtaining adequate financing to complete our exploration
activities. These conditions, as indicated in our audit report on our annual
report on Form 10-KSB, raise substantial doubt as to our ability to continue as
a going concern. The success of our business operations will depend upon our
ability to obtain further financing to complete our planned exploration program
and to attain profitable operations. If we are not able to complete a successful
exploration program and attain sustainable profitable operations, then our
business will fail.

If we are unable to hire and retain key personnel, we may
not be able to implement our business plan.

Our success is dependent upon the performance of key personnel
working full-time in management, supervisory and administrative capacities or as
consultants. This is particularly true in highly technical businesses such as
mineral exploration. These individuals are in high demand and we may not be able
to attract the personnel we need. The loss of the services of senior management
or key personnel could have a material and adverse effect on us, our business
and results of operations. Failure to hire key personnel when needed, or on
acceptable terms, would have a significant negative effect on our business.

As we undertake exploration of our mineral claims, we will
be subject to compliance with government regulation that may increase the
anticipated cost of our exploration program.

There are several governmental regulations that materially
restrict mineral exploration. We are required to obtain work permits, post bonds
and perform remediation work for any physical disturbance to the land in order
to comply with these laws. If we enter the production phase, the cost of
complying with permit and regulatory environment laws will be greater because
the impact on the project area is greater. Permits and regulations will control
all aspects of the production program if the project continues to that stage.
Examples of regulatory requirements include:

| | (a) | Water discharge will have to meet drinking water
      standards;                                                                               
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                 
| | (b) | Dust generation will have to be minimal or otherwise
      re-mediated;                                                                         
| |     |                                                                                                                                                 
| | (c) | Dumping of material on the surface will have to be
      re-contoured and re-vegetated with natural vegetation;                                 
| |     |                                                                                                                                                 
| | (d) | An assessment of all material to be left on the surface
      will need to be environmentally benign;                                           
| |     |                                                                                                                                                 
| | (e) | Ground water will have to be monitored for any potential
      contaminants;                                                                    
| |     |                                                                                                                                                 
| | (f) | The socio-economic impact of the project will have to be
      evaluated and if deemed negative, will have to be re-mediated;
  and             
| |     |                                                                                                                                                 
| | (g) | There will have to be an impact report of the work on the
      local fauna and flora including a study of potentially endangered
      species.

There is a risk that new regulations could increase our costs
of doing business and prevent us from carrying out our exploration program. We
will also have to sustain the cost of reclamation and environmental remediation
for all exploration work undertaken. Both reclamation and environmental
remediation refer to putting disturbed ground back as close to its original
state as possible. Other potential pollution or damage must be cleaned-up and
renewed along standard guidelines outlined in the usual permits. Reclamation is
the process of bringing the land back to its natural state after completion of
exploration activities. Environmental remediation refers to the physical
activity of taking steps to remediate, or remedy, any environmental damage
caused. The amount of these costs is not known at this time as we do not know
the extent of the exploration

27

---

program that will be undertaken beyond completion of the
recommended work program. If remediation costs exceed our cash reserves we may
be unable to complete our exploration program and have to abandon our
operations.

If we become subject to increased environmental laws and
regulation, our operating expenses may increase.

Our development and production operations are regulated by both
US Federal and Nevada state environmental laws that relate to the protection of
air and water quality, hazardous waste management and mine reclamation. These
regulations will impose operating costs on us. If the regulatory environment for
our operations changes in a manner that increases costs of compliance and
reclamation, then our operating expenses would increase with the result that our
financial condition and operating results could be adversely affected.

Because our stock is a penny stock, stockholders will be
more limited in their ability to sell their stock.

The SEC has adopted rules that regulate broker-dealer practices
in connection with transactions in penny stocks. Penny stocks are generally
equity securities with a price of less than $5.00, other than securities
registered on certain national securities exchanges or quoted on the Nasdaq
system, provided that current price and volume information with respect to
transactions in such securities is provided by the exchange or quotation
system.

Because our securities constitute "penny stocks" within the
meaning of the rules, the rules apply to us and to our securities. The rules may
further affect the ability of owners of shares to sell our securities in any
market that might develop for them. As long as the trading price of our common
stock is less than $5.00 per share, the common stock will be subject to Rule
15g-9 under the Exchange Act. The penny stock rules require a broker-dealer,
prior to a transaction in a penny stock, to deliver a standardized risk
disclosure document prepared by the SEC, that:

|1. | contains a description of the nature and level of risk in
      the market for penny stocks in both public offerings and secondary
      trading;                                                                                        
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                          
|2. | contains a description of the broker's or dealer's duties
      to the customer and of the rights and remedies available to the customer
      with respect to a violation to such duties or other requirements of
      securities laws;
|   |                                                                                                                                                                                                                                          
|3. | contains a brief, clear, narrative description of a
      dealer market, including bid and ask prices for penny stocks and the
      significance of the spread between the bid and ask price;                                           
|   |                                                                                                                                                                                                                                          
|4. | contains a toll-free telephone number for inquiries on
      disciplinary actions;                                                                                                                                                       
|   |                                                                                                                                                                                                                                          
|5. | defines significant terms in the disclosure document or
      in the conduct of trading in penny stocks; and                                                                                                                             
|   |                                                                                                                                                                                                                                          
|6. | contains such other information and is in such form,
      including language, type, size and format, as the SEC shall require by
      rule or regulation.                                                                              

The broker-dealer also must provide, prior to effecting any
transaction in a penny stock, the customer with: (a) bid and offer quotations
for the penny stock; (b) the compensation of the broker-dealer and its
salesperson in the transaction; (c) the number of shares to which such bid and
ask prices apply, or other comparable information relating to the depth and
liquidity of the market for such stock; and (d) a monthly account statements
showing the market value of each penny stock held in the customer's account. In
addition, the penny stock rules require that, prior to a transaction in a penny
stock not otherwise exempt from those rules, the broker-dealer must make a
special written determination that the penny stock is a suitable investment for
the purchaser and receive the purchaser's written acknowledgment of the receipt
of a risk disclosure statement, a written agreement to transactions involving
penny stocks, and a signed and dated copy of a written suitability statement.
These disclosure requirements may have the effect of reducing the trading
activity in the secondary market for our stock.

28

---

|ITEM 7. | FINANCIAL STATEMENTS.
|------- | ---------------------

Index to Financial Statements

|   |    |                                                                                                                                      | Page
|-- | -- | ------------------------------------------------------------------------------------------------------------------------------------ | ----
|1. |    | Report
        of Independent Registered Public Accounting Firm:                                                                     | F-1 
|2. |    | Audited Financial Statements
        for the year ended June 30, 2007, including:                                                    |     
|   | a. | Balance
        Sheets as at June 30, 2007 and 2006;                                                                                 | F-2 
|   | b. | Statements
        of Operations for the years ended June 30, 2007 and 2006 and accumulated
        from inception to June 30, 2007; | F-3 
|   | c. | Statements
        of Cash Flows for the years ended June 30, 2007 and 2006 and accumulated
        from inception to June 30, 2007; | F-4 
|   | d. | Statements
        of Stockholders’ Equity (Deficit) for the period from inception
        to June 30, 2007; and                     | F-5 
|   | e. | Notes
        to the Financial Statements.                                                                                           | F-8 

29

---

Canyon Copper Corp. 
  (Formerly Aberdene Mines Limited)
  (An Exploration Stage Company)

June 30, 2007

|                                                        | Index
|------------------------------------------------------- | -----
|                                                        |      
|Report of Independent Registered Public Accounting Firm | F-1  
|                                                        |      
|Balance Sheets                                          | F-2  
|                                                        |      
|Statements of Operations                                | F-3  
|                                                        |      
|Statements of Cash Flows                                | F-4  
|                                                        |      
|Statement of Stockholders Equity (Deficit)             | F-5  
|                                                        |      
|Notes to the Financial Statements                       | F-8  

---




Report of Independent Registered Public Accounting Firm

To the Stockholders and Directors 
  of Canyon Copper Corp. (formerly Aberdene Mines Limited)
  (An Exploration Stage Company)

We have audited the accompanying balance sheets of Canyon Copper
  Corp. (formerly Aberdene Mines Limited) (An Exploration Stage Company) as of
  June 30, 2007 and 2006 and the related statements of operations, cash flows
  and stockholders deficit for the years then ended and accumulated for
  the period from January 21, 2000 (Date of Inception) to June 30, 2007. These
  financial statements are the responsibility of the Companys management.
  Our responsibility is to express an opinion on these financial statements based
  on our audits.

We conducted our audits in accordance with the standards of the
  Public Company Accounting Oversight Board (United States). Those standards require
  that we plan and perform the audits to obtain reasonable assurance about whether
  the financial statements are free of material misstatement. An audit includes
  examining, on a test basis, evidence supporting the amounts and disclosures
  in the financial statements. An audit also includes assessing the accounting
  principles used and significant estimates made by management, as well as evaluating
  the overall financial statement presentation. We believe that our audits provide
  a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present
  fairly, in all material respects, the financial position of Canyon Copper Corp.
  (formerly Aberdene Mines Limited) (An Exploration Stage Company), as of June
  30, 2007 and 2006, and the results of its operations and its cash flows for
  the years then ended and accumulated for the period from January 21, 2000 (Date
  of Inception) to June 30, 2007, in conformity with generally accepted accounting
  principles used in the United States.

The accompanying financial statements have been prepared assuming
  the Company will continue as a going concern. As discussed in Note 1 to the
  financial statements, the Company has not generated any revenue, has a working
  capital deficit and has incurred significant losses since inception. These factors
  raise substantial doubt about the Companys ability to continue as a going
  concern. Managements plans in regard to these matters are also discussed
  in Note 1. The financial statements do not include any adjustments that might
  result from the outcome of this uncertainty.

/S/ MANNING ELLIOTT LLP
  CHARTERED ACCOUNTANTS

Vancouver, Canada

September 26, 2007

F-1

---

Canyon Copper Corp.
  (Formerly Aberdene Mines Limited)
  (An Exploration Stage Company)
  Balance Sheets
  (Expressed in U.S. dollars)

|                                                                |   | June 30,    |   |   | June 30,    |  
|--------------------------------------------------------------- | - | ----------- | - | - | ----------- | -
|                                                                |   | 2007        |   |   | 2006        |  
|                                                                | $ |             |   | $ |             |  
|ASSETS                                                          |   |             |   |   |             |  
|Current Assets                                                  |   |             |   |   |             |  
|Cash                                                            |   | 34,401      |   |   | 139,750     |  
|Amount receivable                                               |   |            |   |   | 3,000       |  
|Investment securities                                           |   |            |   |   | 224,053     |  
|Prepaid expenses
      and deposits                             |   | 15,923      |   |   | 26,362      |  
|Total Current Assets                                            |   | 50,324      |   |   | 393,165     |  
|Property and Equipment
      (Note 3)                           |   |            |   |   | 10,811      |  
|Total Assets                                                    |   | 50,324      |   |   | 403,976     |  
|LIABILITIES AND STOCKHOLDERS DEFICIT                           |   |             |   |   |             |  
|Current Liabilities                                             |   |             |   |   |             |  
|Accounts payable                                                |   | 222,153     |   |   | 377,811     |  
|Accrued liabilities (Note 5)                                    |   | 64,829      |   |   | 220,906     |  
|Due to related parties (Note 6)                                 |   | 85,448      |   |   | 9,092       |  
|Loan payable (Note 7(a))                                        |   | 23,509      |   |   |            |  
|Convertible debt, less unaccreted discount of $63,958
      and |   |             |   |   |             |  
|$nil, respectively (Note 8)                                     |   | 703,061     |   |   | 284,999     |  
|Derivative liability                                            |   | 41,201      |   |   |            |  
|Total Current Liabilities                                       |   | 1,140,201   |   |   | 892,808     |  
|Contingencies and Commitments (Notes 1 and 12)                  |   |             |   |   |             |  
|                                                                |   |             |   |   |             |  
|Stockholders Deficit                                           |   |             |   |   |             |  
|Preferred Stock                                                 |   |             |   |   |             |  
|Authorized: 100,000,000 shares, par value $0.00001              |   |             |   |   |             |  
|Issued and outstanding: 500,000
      shares                    |   | 5           |   |   | 5           |  
|Common Stock                                                    |   |             |   |   |             |  
|Authorized: 500,000,000 shares, par value
      $0.00001        |   |             |   |   |             |  
|Issued and outstanding: 70,781,399 shares (2006 - 65,705,596)   |   | 708         |   |   | 658         |  
|Additional Paid-in Capital                                      |   | 14,769,378  |   |   | 13,193,195  |  
|Deficit Accumulated
      During the Exploration Stage          |   | (15,859,968 | ) |   | (13,682,690 | )
|Total Stockholders Deficit                                     |   | (1,089,877  | ) |   | (488,832    | )
|Total Liabilities
      and Stockholders Deficit               |   | 50,324      |   |   | 403,976     |  

The Accompanying Notes are an Integral Part of These Financial
  Statements
  F-2

---

Canyon Copper Corp.
  (Formerly Aberdene Mines Limited)
  (An Exploration Stage Company)
  Statements of Operations
  (Expressed in U.S. dollars)

|                                                    |  | Accumulated from    |   |  |                                           |   |  |            |  
|--------------------------------------------------- |  | ------------------- | - |  | ----------------------------------------- | - |  | ---------- | -
|                                                    |  | January 21, 2000    |   |  | For the 
      Year Ended 
      June 30, |  
|                                                    |  | (Date of Inception) |   |  |                                          
|                                                    |  | to June 30,         |   |  |                                          
|                                                    |  | 2007                |   |  | 2007                                      |   |  | 2006       |  
|                                                    |  | $                   |   |  | $                                         |   |  | $          |  
|                                                    |  |                     |   |  |                                           |   |  |            |  
|Revenue                                             |  |                    |   |  |                                          |   |  |           |  
|                                                    |  |                     |   |  |                                           |   |  |            |  
|Expenses                                            |  |                     |   |  |                                           |   |  |            |  
|                                                    |  |                     |   |  |                                           |   |  |            |  
|Depreciation                                        |  | 5,540               |   |  |                                          |   |  | 3,532      |  
|Foreign exchange loss (gain)                        |  | (18,364             | ) |  | 8,448                                     |   |  | 12,900     |  
|General and administrative                          |  | 7,470,515           |   |  | 638,380                                   |   |  | 4,301,001  |  
|Impairment of mineral property costs                |  | 2,759,130           |   |  | 477,588                                   |   |  | 405,000    |  
|Impairment of property
      and equipment          |  | 10,811              |   |  | 10,811                                    |   |  |           |  
|Mineral
      exploration costs                     |  | 4,080,320           |   |  | 482,653                                   |   |  | 2,509,786  |  
|                                                    |  |                     |   |  |                                           |   |  |            |  
|Total Operating Expenses                            |  | 14,307,952          |   |  | 1,617,880                                 |   |  | 7,232,219  |  
|                                                    |  |                     |   |  |                                           |   |  |            |  
|Operating Loss                                      |  | (14,307,952         | ) |  | (1,617,880                                | ) |  | (7,232,219 | )
|                                                    |  |                     |   |  |                                           |   |  |            |  
|Other Income (Expense)                              |  |                     |   |  |                                           |   |  |            |  
|                                                    |  |                     |   |  |                                           |   |  |            |  
|Accretion of discounts on convertible debt          |  | (415,816            | ) |  | (235,633                                  | ) |  |           |  
|Gain on change in fair
      values of beneficial   |  |                     |   |  |                                           |   |  |            |  
|conversion features                                 |  | 3,641               |   |  | 3,641                                     |   |  |           |  
|Gain (loss) on settlement
      of debt             |  | (2,871              | ) |  |                                          |   |  | 10,964     |  
|Impairment loss on investment securities            |  | (579,032            | ) |  | (224,053                                  | ) |  | (354,979   | )
|Interest expense                                    |  | (146,508            | ) |  | (103,353                                  | ) |  | (27,571    | )
|Loss
      on sale of investment securities         |  | (411,430            | ) |  |                                          |   |  | (88,332    | )
|                                                    |  |                     |   |  |                                           |   |  |            |  
|Total Other Income
      (Expense)                  |  | (1,552,016          | ) |  | (559,398                                  | ) |  | (459,918   | )
|                                                    |  |                     |   |  |                                           |   |  |            |  
|Net Loss                                            |  | (15,859,968         | ) |  | (2,177,278                                | ) |  | (7,692,137 | )
|                                                    |  |                     |   |  |                                           |   |  |            |  
|Net Loss Per Common
      Share  Basic and Diluted |  |                     |   |  | (0.03                                     | ) |  | (0.13      | )
|                                                    |  |                     |   |  |                                           |   |  |            |  
|Weighted Average Common
      Shares Outstanding    |  |                     |   |  | 66,913,000                                |   |  | 60,903,000 |  

The Accompanying Notes are an Integral Part of These Financial
  Statements
  F-3

---

Canyon Copper Corp.
  (Formerly Aberdene Mines Limited)
  (An Exploration Stage Company)
  Statements of Cash Flows
  (Expressed in U.S. dollars)

|                                                                      |  | Accumulated from    |   |  |            |   |  |            |  
|--------------------------------------------------------------------- |  | ------------------- | - |  | ---------- | - |  | ---------- | -
|                                                                      |  | January 21, 2000    |   |  | For the    |  
|                                                                      |  | (Date of Inception) |   |  | Year Ended |  
|                                                                      |  | to June 30,         |   |  | June 30,   |  
|                                                                      |  | 2007                |   |  | 2007       |   |  | 2006       |  
|                                                                      |  | $                   |   |  | $          |   |  | $          |  
|Operating Activities                                                  |  |                     |   |  |            |   |  |            |  
|Net loss                                                              |  | (15,859,968         | ) |  | (2,177,278 | ) |  | (7,692,137 | )
|Adjustments to reconcile net loss to net cash
      used in operating |  |                     |   |  |            |   |  |            |  
|activities:                                                           |  |                     |   |  |            |   |  |            |  
|                                                                      |  |                     |   |  |            |   |  |            |  
|Accretion
      of discounts on convertible debt                      |  | 415,816             |   |  | 235,633    |   |  |           |  
|Amortization of deferred
      financing costs                        |  | 27,475              |   |  | 27,475     |   |  |           |  
|Bad debt
      expense                                                |  | 3,000               |   |  | 3,000      |   |  |           |  
|Depreciation                                                          |  | 5,540               |   |  |           |   |  | 3,532      |  
|Foreign exchange
      translation loss (gain)                        |  | (25,695             | ) |  |           |   |  | 16,302     |  
|Gain on change in fair values
      of beneficial conversion features |  | (3,641              | ) |  | (3,641     | ) |  |           |  
|Impairment of mineral
      property costs                            |  | 2,747,630           |   |  | 466,088    |   |  | 405,000    |  
|Impairment loss on investment securities                              |  | 579,032             |   |  | 224,053    |   |  | 354,979    |  
|Impairment
      of property and equipment                            |  | 10,811              |   |  | 10,811     |   |  |            |  
|Loss on sale of investment
      securities                           |  | 411,430             |   |  |           |   |  | 88,332     |  
|Loss (gain)
      on settlement of related party debt                 |  | 2,871               |   |  |           |   |  | (10,964    | )
|Stock-based compensation                                              |  | 3,930,558           |   |  |           |   |  | 3,238,945  |  
|Changes in operating assets and
      liabilities:                    |  |                     |   |  |            |   |  |            |  
|                                                                      |  |                     |   |  |            |   |  |            |  
|Amount receivable                                                     |  | (3,000              | ) |  |           |   |  | (3,000     | )
|Prepaid expenses and deposits                                         |  | (15,923             | ) |  | 10,439     |   |  | (16,280    | )
|Accounts payable and accrued
      liabilities                        |  | 448,687             |   |  | (152,500   | ) |  | 483,384    |  
|Due
      to related parties                                          |  | 186,075             |   |  | 81,656     |   |  | (14,992    | )
|Net Cash Used in Operating Activities                                 |  | (7,139,302          | ) |  | (1,274,264 | ) |  | (3,146,899 | )
|                                                                      |  |                     |   |  |            |   |  |            |  
|Investing Activities                                                  |  |                     |   |  |            |   |  |            |  
|Mineral property costs                                                |  | (413,138            | ) |  | (293,138   | ) |  | (120,000   | )
|Proceeds from the sale of investment
      securities                 |  | 417,251             |   |  |           |   |  | 48,123     |  
|Purchase
      of property and equipment                              |  | (16,351             | ) |  |           |   |  | (10,122    | )
|Net Cash Used in Investing Activities                                 |  | (12,238             | ) |  | (293,138   | ) |  | (81,999    | )
|                                                                      |  |                     |   |  |            |   |  |            |  
|Financing Activities                                                  |  |                     |   |  |            |   |  |            |  
|                                                                      |  |                     |   |  |            |   |  |            |  
|Advances from related parties                                         |  | 147,019             |   |  | 147,019    |   |  |           |  
|Proceeds from issuance of convertible debt                            |  | 1,684,655           |   |  | 500,000    |   |  |           |  
|Proceeds from notes and loans
      payable                           |  | 373,788             |   |  | 373,790    |   |  |           |  
|Repayment of notes payable                                            |  | (230,281            | ) |  | (230,281   | ) |  |           |  
|Financing costs                                                       |  | (250,143            | ) |  | (27,475    | ) |  | (222,668   | )
|Issuance
      of common stock                                        |  | 5,460,903           |   |  | 699,000    |   |  | 3,542,500  |  
|Net Cash Provided by Financing Activities                             |  | 7,185,941           |   |  | 1,462,053  |   |  | 3,319,832  |  
|Increase (Decrease) in Cash                                           |  | 34,401              |   |  | (105,349   | ) |  | 90,934     |  
|Cash  Beginning of Period                                            |  |                    |   |  | 139,750    |   |  | 48,816     |  
|Cash  End of
      Period                                            |  | 34,401              |   |  | 34,401     |   |  | 139,750    |  
|Non-cash Investing and Financing Activities:                          |  |                     |   |  |            |   |  |            |  
|Preferred stock issued for investment securities                      |  | 1,535,575           |   |  |           |   |  |           |  
|Investment securities used to
      pay the finders fee for the      |  |                     |   |  |            |   |  |            |  
|preferred stock issuance                                              |  | 153,557             |   |  |           |   |  |           |  
|Common stock issued to settle
      debt                              |  | 547,737             |   |  | 449,534    |   |  | 23,585     |  
|Common
      stock issued for mineral property acquisition costs      |  | 2,334,492           |   |  | 172,950    |   |  | 285,000    |  
|Supplemental Disclosures:                                             |  |                     |   |  |            |   |  |            |  
|                                                                      |  |                     |   |  |            |   |  |            |  
|Interest paid                                                         |  |                    |   |  |           |   |  |           |  
|Income
      taxes paid                                               |  |                    |   |  |           |   |  |           |  

The Accompanying Notes are an Integral Part of These Financial
  Statements
  F-4

---

Canyon Copper Corp.
  (Formerly Aberdene Mines Limited)
  (An Exploration Stage Company)
  Statement of Stockholders Equity (Deficit)
  From January 21, 2000 (Date of Inception) to June 30, 2006
  (Expressed in US dollars)

|                              |  |                 |  |  |              |  |  |             |   |  |        |   |  |           |   |  |            |  |  |               |  |  | Deficit     |   |  |            |  
|----------------------------- |  | --------------- |  |  | ------------ |  |  | ----------- | - |  | ------ | - |  | --------- | - |  | ---------- |  |  | ------------- |  |  | ----------- | - |  | ---------- | -
|                              |  |                 |  |  |              |  |  |             |   |  |        |   |  |           |   |  |            |  |  | Accumulated   |  |  | Accumulated |   |  |            |  
|                              |  | Preferred Stock |  |  | Common Stock |  |  | Additional  |   |  | Common |   |  | Other     |   |  | During the |  |  |               | 
|                              |  |                 |  |  | Par          |  |  |             |   |  | Par    |   |  | Paid-in   |   |  | Stock      |  |  | Comprehensive |  |  | Exploration |   |  |            |  
|                              |  | Shares          |  |  | Value        |  |  | Shares      |   |  | Value  |   |  | Capital   |   |  | Subscribed |  |  | Loss          |  |  | Stage       |   |  | Total      |  
|                              |  | #               |  |  | $            |  |  | #           |   |  | $      |   |  | $         |   |  | $          |  |  | $             |  |  | $           |   |  | $          |  
|                              |  |                 |  |  |              |  |  |             |   |  |        |   |  |           |   |  |            |  |  |               |  |  |             |   |  |            |  
|Balance  January 21,         |  |                 |  |  |              |  |  |             |   |  |        |   |  |           |   |  |            |  |  |               |  |  |             |   |  |            |  
|2000 (Date of Inception)      |  |                |  |  |             |  |  |            |   |  |       |   |  |          |   |  |           |  |  |              |  |  |            |   |  |           |  
|Issuance of stock for         |  |                 |  |  |              |  |  |             |   |  |        |   |  |           |   |  |            |  |  |               |  |  |             |   |  |            |  
|services and payment of       |  |                 |  |  |              |  |  |             |   |  |        |   |  |           |   |  |            |  |  |               |  |  |             |   |  |            |  
|advances for $0.002 per       |  |                 |  |  |              |  |  |             |   |  |        |   |  |           |   |  |            |  |  |               |  |  |             |   |  |            |  
|share                         |  |                |  |  |             |  |  | 138,000,000 |   |  | 1,380  |   |  | 273,620   |   |  |           |  |  |              |  |  |            |   |  | 275,000    |  
|Net loss for
      the period |  |                |  |  |             |  |  |            |   |  |       |   |  |          |   |  |           |  |  |              |  |  | (290,820    | ) |  | (290,820   | )
|Balance  June 30, 2000       |  |                |  |  |             |  |  | 138,000,000 |   |  | 1,380  |   |  | 273,620   |   |  |           |  |  |              |  |  | (290,820    | ) |  | (15,820    | )
|Net loss for
      the year   |  |                |  |  |             |  |  |            |   |  |       |   |  |          |   |  |           |  |  |              |  |  | (11,766     | ) |  | (11,766    | )
|Balance  June 30, 2001       |  |                |  |  |             |  |  | 138,000,000 |   |  | 1,380  |   |  | 273,620   |   |  |           |  |  |              |  |  | (302,586    | ) |  | (27,586    | )
|Issuance of stock for         |  |                 |  |  |              |  |  |             |   |  |        |   |  |           |   |  |            |  |  |               |  |  |             |   |  |            |  
|cash at $0.0036 per           |  |                 |  |  |              |  |  |             |   |  |        |   |  |           |   |  |            |  |  |               |  |  |             |   |  |            |  
|share                         |  |                |  |  |             |  |  | 20,534,814  |   |  | 205    |   |  | 74,196    |   |  |           |  |  |              |  |  |            |   |  | 74,401     |  
|Net loss for the year         |  |                |  |  |             |  |  |            |   |  |       |   |  |          |   |  |           |  |  |              |  |  | (43,817     | ) |  | (43,817    | )
|Balance  June 30, 2002       |  |                |  |  |             |  |  | 158,534,814 |   |  | 1,585  |   |  | 347,816   |   |  |           |  |  |              |  |  | (346,403    | ) |  | 2,998      |  
|Net loss for the year         |  |                |  |  |             |  |  |            |   |  |       |   |  |          |   |  |           |  |  |              |  |  | (17,713     | ) |  | (17,713    | )
|Balance  June 30, 2003       |  |                |  |  |             |  |  | 158,534,814 |   |  | 1,585  |   |  | 347,816   |   |  |           |  |  |              |  |  | (364,116    | ) |  | (14,715    | )
|Cancellation of stock         |  |                 |  |  |              |  |  |             |   |  |        |   |  |           |   |  |            |  |  |               |  |  |             |   |  |            |  
|owned by a director           |  |                |  |  |             |  |  | (88,000,000 | ) |  | (880   | ) |  | 880       |   |  |           |  |  |              |  |  |            |   |  |           |  
|Conversion of                 |  |                 |  |  |              |  |  |             |   |  |        |   |  |           |   |  |            |  |  |               |  |  |             |   |  |            |  
|debentures                    |  |                |  |  |             |  |  |            |   |  |       |   |  |          |   |  | 902,126    |  |  |              |  |  |            |   |  | 902,126    |  
|Issuance of stock for         |  |                 |  |  |              |  |  |             |   |  |        |   |  |           |   |  |            |  |  |               |  |  |             |   |  |            |  
|cash at $1.50 per share       |  |                |  |  |             |  |  | 700,000     |   |  | 7      |   |  | 1,049,993 |   |  |           |  |  |              |  |  |            |   |  | 1,050,000  |  
|Stock issuance costs          |  |                |  |  |             |  |  |            |   |  |       |   |  | (105,000  | ) |  |           |  |  |              |  |  |            |   |  | (105,000   | )
|Net loss for
      the year   |  |                |  |  |             |  |  |            |   |  |       |   |  |          |   |  |           |  |  |              |  |  | (1,601,036  | ) |  | (1,601,036 | )
|Balance  June 30, 2004       |  |                |  |  |             |  |  | 71,234,814  |   |  | 712    |   |  | 1,293,689 |   |  | 902,126    |  |  |              |  |  | (1,965,152  | ) |  | 231,375    |  

The Accompanying Notes are an Integral Part of These Financial
  Statements
  F-5

---

Canyon Copper Corp.
  (Formerly Aberdene Mines Limited)
  (An Exploration Stage Company)
  Statement of Stockholders Equity (Deficit)
  From January 21, 2000 (Date of Inception) to June 30, 2006
  (Expressed in US dollars)

|                              |  |                 |  |  |              |  |  |             |   |  |        |   |  |           |   |  |            |   |  |               |   |  | Deficit     |   |  |            |  
|----------------------------- |  | --------------- |  |  | ------------ |  |  | ----------- | - |  | ------ | - |  | --------- | - |  | ---------- | - |  | ------------- | - |  | ----------- | - |  | ---------- | -
|                              |  |                 |  |  |              |  |  |             |   |  |        |   |  |           |   |  |            |   |  | Accumulated   |   |  | Accumulated |   |  |            |  
|                              |  | Preferred Stock |  |  | Common Stock |  |  | Additional  |   |  | Common |   |  | Other     |   |  | During the |   |  |               |  
|                              |  |                 |  |  | Par          |  |  |             |   |  | Par    |   |  | Paid-in   |   |  | Stock      |   |  | Comprehensive |   |  | Exploration |   |  |            |  
|                              |  | Shares          |  |  | Value        |  |  | Shares      |   |  | Value  |   |  | Capital   |   |  | Subscribed |   |  | Loss          |   |  | Stage       |   |  | Total      |  
|                              |  | #               |  |  | $            |  |  | #           |   |  | $      |   |  | $         |   |  | $          |   |  | $             |   |  | $           |   |  | $          |  
|                              |  |                 |  |  |              |  |  |             |   |  |        |   |  |           |   |  |            |   |  |               |   |  |             |   |  |            |  
|                              |  |                 |  |  |              |  |  |             |   |  |        |   |  |           |   |  |            |   |  |               |   |  |             |   |  |            |  
|Balance  June 30, 2004       |  |                |  |  |             |  |  | 71,234,814  |   |  | 712    |   |  | 1,293,689 |   |  | 902,126    |   |  |              |   |  | (1,965,152  | ) |  | 231,375    |  
|                              |  |                 |  |  |              |  |  |             |   |  |        |   |  |           |   |  |            |   |  |               |   |  |             |   |  |            |  
|Issuance of stock for         |  |                 |  |  |              |  |  |             |   |  |        |   |  |           |   |  |            |   |  |               |   |  |             |   |  |            |  
|consulting services           |  |                |  |  |             |  |  | 400,000     |   |  | 4      |   |  | 761,996   |   |  |           |   |  |              |   |  |            |   |  | 762,000    |  
|                              |  |                 |  |  |              |  |  |             |   |  |        |   |  |           |   |  |            |   |  |               |   |  |             |   |  |            |  
|Cancellation of stock issued  |  |                 |  |  |              |  |  |             |   |  |        |   |  |           |   |  |            |   |  |               |   |  |             |   |  |            |  
|for consulting services       |  |                |  |  |             |  |  | (200,000    | ) |  | (2     | ) |  | (727,998  | ) |  |           |   |  |              |   |  |            |   |  | (728,000   | )
|                              |  |                 |  |  |              |  |  |             |   |  |        |   |  |           |   |  |            |   |  |               |   |  |             |   |  |            |  
|Issuance of stock pursuant to |  |                 |  |  |              |  |  |             |   |  |        |   |  |           |   |  |            |   |  |               |   |  |             |   |  |            |  
|the exercise of options       |  |                |  |  |             |  |  | 400,000     |   |  | 4      |   |  | 199,996   |   |  |           |   |  |              |   |  |            |   |  | 200,000    |  
|                              |  |                 |  |  |              |  |  |             |   |  |        |   |  |           |   |  |            |   |  |               |   |  |             |   |  |            |  
|Issuance of stock pursuant to |  |                 |  |  |              |  |  |             |   |  |        |   |  |           |   |  |            |   |  |               |   |  |             |   |  |            |  
|conversion of debentures      |  |                |  |  |             |  |  | 549,405     |   |  | 6      |   |  | 902,120   |   |  | (902,126   | ) |  |              |   |  |            |   |  |           |  
|                              |  |                 |  |  |              |  |  |             |   |  |        |   |  |           |   |  |            |   |  |               |   |  |             |   |  |            |  
|Issuance of stock pursuant to |  |                 |  |  |              |  |  |             |   |  |        |   |  |           |   |  |            |   |  |               |   |  |             |   |  |            |  
|mineral property option       |  |                 |  |  |              |  |  |             |   |  |        |   |  |           |   |  |            |   |  |               |   |  |             |   |  |            |  
|agreements                    |  |                |  |  |             |  |  | 1,410,000   |   |  | 14     |   |  | 1,876,486 |   |  |           |   |  |              |   |  |            |   |  | 1,876,500  |  
|                              |  |                 |  |  |              |  |  |             |   |  |        |   |  |           |   |  |            |   |  |               |   |  |             |   |  |            |  
|Issuance of stock to settle   |  |                 |  |  |              |  |  |             |   |  |        |   |  |           |   |  |            |   |  |               |   |  |             |   |  |            |  
|related party debt            |  |                |  |  |             |  |  | 197,633     |   |  | 2      |   |  | 73,122    |   |  |           |   |  |              |   |  |            |   |  | 73,124     |  
|                              |  |                 |  |  |              |  |  |             |   |  |        |   |  |           |   |  |            |   |  |               |   |  |             |   |  |            |  
|Cancellation of stock owned   |  |                 |  |  |              |  |  |             |   |  |        |   |  |           |   |  |            |   |  |               |   |  |             |   |  |            |  
|by the President of the       |  |                 |  |  |              |  |  |             |   |  |        |   |  |           |   |  |            |   |  |               |   |  |             |   |  |            |  
|Company                       |  |                |  |  |             |  |  | (20,000,000 | ) |  | (200   | ) |  | 200       |   |  |           |   |  |              |   |  |            |   |  |           |  
|                              |  |                 |  |  |              |  |  |             |   |  |        |   |  |           |   |  |            |   |  |               |   |  |             |   |  |            |  
|Issuance of preferred stock   |  |                 |  |  |              |  |  |             |   |  |        |   |  |           |   |  |            |   |  |               |   |  |             |   |  |            |  
|for investment securities     |  | 500,000         |  |  | 5            |  |  |            |   |  |       |   |  | 1,382,013 |   |  |           |   |  |              |   |  |            |   |  | 1,382,018  |  
|                              |  |                 |  |  |              |  |  |             |   |  |        |   |  |           |   |  |            |   |  |               |   |  |             |   |  |            |  
|Unrealized loss on            |  |                 |  |  |              |  |  |             |   |  |        |   |  |           |   |  |            |   |  |               |   |  |             |   |  |            |  
|investment securities         |  |                |  |  |             |  |  |            |   |  |       |   |  |          |   |  |           |   |  | (437,712      | ) |  |            |   |  | (437,712   | )
|                              |  |                 |  |  |              |  |  |             |   |  |        |   |  |           |   |  |            |   |  |               |   |  |             |   |  |            |  
|Fair value of stock options   |  |                 |  |  |              |  |  |             |   |  |        |   |  |           |   |  |            |   |  |               |   |  |             |   |  |            |  
|granted                       |  |                |  |  |             |  |  |            |   |  |       |   |  | 384,144   |   |  |           |   |  |              |   |  |            |   |  | 384,144    |  
|                              |  |                 |  |  |              |  |  |             |   |  |        |   |  |           |   |  |            |   |  |               |   |  |             |   |  |            |  
|Intrinsic value of beneficial |  |                 |  |  |              |  |  |             |   |  |        |   |  |           |   |  |            |   |  |               |   |  |             |   |  |            |  
|conversion features           |  |                |  |  |             |  |  |            |   |  |       |   |  | 180,183   |   |  |           |   |  |              |   |  |            |   |  | 180,183    |  
|                              |  |                 |  |  |              |  |  |             |   |  |        |   |  |           |   |  |            |   |  |               |   |  |             |   |  |            |  
|Net loss for
      the year   |  |                |  |  |             |  |  |            |   |  |       |   |  |          |   |  |           |   |  |              |   |  | (4,025,401  | ) |  | (4,025,401 | )
|                              |  |                 |  |  |              |  |  |             |   |  |        |   |  |           |   |  |            |   |  |               |   |  |             |   |  |            |  
|Balance  June
      30, 2005 |  | 500,000         |  |  | 5            |  |  | 53,991,852  |   |  | 540    |   |  | 6,325,951 |   |  |           |   |  | (437,712      | ) |  | (5,990,553  | ) |  | (101,769   | )

The Accompanying Notes are an Integral Part of These Financial
  Statements
  F-6

---

Canyon Copper Corp.
  (Formerly Aberdene Mines Limited)
  (An Exploration Stage Company)
  Statement of Stockholders Equity (Deficit)
  From January 21, 2000 (Date of Inception) to June 30, 2006
  (Expressed in US dollars)

|                                  |  |                 |  |  |              |  |  |            |  |  |        |  |  |            |   |  |            |  |  |               |   |  | Deficit     |   |  |            |  
|--------------------------------- |  | --------------- |  |  | ------------ |  |  | ---------- |  |  | ------ |  |  | ---------- | - |  | ---------- |  |  | ------------- | - |  | ----------- | - |  | ---------- | -
|                                  |  |                 |  |  |              |  |  |            |  |  |        |  |  |            |   |  |            |  |  | Accumulated   |   |  | Accumulated |   |  |            |  
|                                  |  | Preferred Stock |  |  | Common Stock |  |  | Additional |  |  | Common |  |  | Other      |   |  | During the |  |  |               |  
|                                  |  |                 |  |  | Par          |  |  |            |  |  | Par    |  |  | Paid-in    |   |  | Stock      |  |  | Comprehensive |   |  | Exploration |   |  |            |  
|                                  |  | Shares          |  |  | Value        |  |  | Shares     |  |  | Value  |  |  | Capital    |   |  | Subscribed |  |  | Loss          |   |  | Stage       |   |  | Total      |  
|                                  |  | #               |  |  | $            |  |  | #          |  |  | $      |  |  | $          |   |  | $          |  |  | $             |   |  | $           |   |  | $          |  
|                                  |  |                 |  |  |              |  |  |            |  |  |        |  |  |            |   |  |            |  |  |               |   |  |             |   |  |            |  
|                                  |  |                 |  |  |              |  |  |            |  |  |        |  |  |            |   |  |            |  |  |               |   |  |             |   |  |            |  
|Balance  June 30, 2005           |  | 500,000         |  |  | 5            |  |  | 53,991,852 |  |  | 540    |  |  | 6,325,951  |   |  |           |  |  | (437,712      | ) |  | (5,990,553  | ) |  | (101,769   | )
|                                  |  |                 |  |  |              |  |  |            |  |  |        |  |  |            |   |  |            |  |  |               |   |  |             |   |  |            |  
|Issuance of stock for cash at     |  |                 |  |  |              |  |  |            |  |  |        |  |  |            |   |  |            |  |  |               |   |  |             |   |  |            |  
|$0.25 per share                   |  |                |  |  |             |  |  | 5,000,000  |  |  | 50     |  |  | 1,249,950  |   |  |           |  |  |              |   |  |            |   |  | 1,250,000  |  
|                                  |  |                 |  |  |              |  |  |            |  |  |        |  |  |            |   |  |            |  |  |               |   |  |             |   |  |            |  
|Issuance of stock for cash at     |  |                 |  |  |              |  |  |            |  |  |        |  |  |            |   |  |            |  |  |               |   |  |             |   |  |            |  
|$0.30 per share                   |  |                |  |  |             |  |  | 1,500,000  |  |  | 15     |  |  | 449,985    |   |  |           |  |  |              |   |  |            |   |  | 450,000    |  
|                                  |  |                 |  |  |              |  |  |            |  |  |        |  |  |            |   |  |            |  |  |               |   |  |             |   |  |            |  
|Issuance of stock for geological  |  |                 |  |  |              |  |  |            |  |  |        |  |  |            |   |  |            |  |  |               |   |  |             |   |  |            |  
|data at a fair value of $0.39 per |  |                 |  |  |              |  |  |            |  |  |        |  |  |            |   |  |            |  |  |               |   |  |             |   |  |            |  
|share                             |  |                |  |  |             |  |  | 25,000     |  |  |       |  |  | 9,750      |   |  |           |  |  |              |   |  |            |   |  | 9,750      |  
|                                  |  |                 |  |  |              |  |  |            |  |  |        |  |  |            |   |  |            |  |  |               |   |  |             |   |  |            |  
|Issuance of stock to settle debt  |  |                 |  |  |              |  |  |            |  |  |        |  |  |            |   |  |            |  |  |               |   |  |             |   |  |            |  
|at a fair value of $0.37 per      |  |                 |  |  |              |  |  |            |  |  |        |  |  |            |   |  |            |  |  |               |   |  |             |   |  |            |  
|share                             |  |                |  |  |             |  |  | 63,744     |  |  | 1      |  |  | 23,584     |   |  |           |  |  |              |   |  |            |   |  | 23,585     |  
|                                  |  |                 |  |  |              |  |  |            |  |  |        |  |  |            |   |  |            |  |  |               |   |  |             |   |  |            |  
|Issuance of stock for cash at     |  |                 |  |  |              |  |  |            |  |  |        |  |  |            |   |  |            |  |  |               |   |  |             |   |  |            |  
|$0.40 per share                   |  |                |  |  |             |  |  | 4,475,000  |  |  | 45     |  |  | 1,789,955  |   |  |           |  |  |              |   |  |            |   |  | 1,790,000  |  
|                                  |  |                 |  |  |              |  |  |            |  |  |        |  |  |            |   |  |            |  |  |               |   |  |             |   |  |            |  
|Share issuance costs              |  |                |  |  |             |  |  |           |  |  |       |  |  | (222,668   | ) |  |           |  |  |              |   |  |            |   |  | (222,668   | )
|                                  |  |                 |  |  |              |  |  |            |  |  |        |  |  |            |   |  |            |  |  |               |   |  |             |   |  |            |  
|Issuance of stock pursuant to a   |  |                 |  |  |              |  |  |            |  |  |        |  |  |            |   |  |            |  |  |               |   |  |             |   |  |            |  
|mineral property agreement        |  |                |  |  |             |  |  | 500,000    |  |  | 5      |  |  | 284,995    |   |  |           |  |  |              |   |  |            |   |  | 285,000    |  
|                                  |  |                 |  |  |              |  |  |            |  |  |        |  |  |            |   |  |            |  |  |               |   |  |             |   |  |            |  
|Fair value of stock options       |  |                 |  |  |              |  |  |            |  |  |        |  |  |            |   |  |            |  |  |               |   |  |             |   |  |            |  
|granted                           |  |                |  |  |             |  |  |           |  |  |       |  |  | 3,229,195  |   |  |           |  |  |              |   |  |            |   |  | 3,229,195  |  
|                                  |  |                 |  |  |              |  |  |            |  |  |        |  |  |            |   |  |            |  |  |               |   |  |             |   |  |            |  
|Issuance of stock pursuant to     |  |                 |  |  |              |  |  |            |  |  |        |  |  |            |   |  |            |  |  |               |   |  |             |   |  |            |  
|the exercise of stock options     |  |                |  |  |             |  |  | 150,000    |  |  | 2      |  |  | 52,498     |   |  |           |  |  |              |   |  |            |   |  | 52,500     |  
|                                  |  |                 |  |  |              |  |  |            |  |  |        |  |  |            |   |  |            |  |  |               |   |  |             |   |  |            |  
|Unrealized loss on investment     |  |                 |  |  |              |  |  |            |  |  |        |  |  |            |   |  |            |  |  |               |   |  |             |   |  |            |  
|securities recognized as an       |  |                 |  |  |              |  |  |            |  |  |        |  |  |            |   |  |            |  |  |               |   |  |             |   |  |            |  
|impairment loss                   |  |                |  |  |             |  |  |           |  |  |       |  |  |           |   |  |           |  |  | 437,712       |   |  |            |   |  | 437,712    |  
|                                  |  |                 |  |  |              |  |  |            |  |  |        |  |  |            |   |  |            |  |  |               |   |  |             |   |  |            |  
|Net loss for the year             |  |                |  |  |             |  |  |           |  |  |       |  |  |           |   |  |           |  |  |              |   |  | (7,692,137  | ) |  | (7,692,137 | )
|                                  |  |                 |  |  |              |  |  |            |  |  |        |  |  |            |   |  |            |  |  |               |   |  |             |   |  |            |  
|Balance  June 30, 2006           |  | 500,000         |  |  | 5            |  |  | 65,705,596 |  |  | 658    |  |  | 13,193,195 |   |  |           |  |  |              |   |  | (13,682,690 | ) |  | (488,832   | )
|                                  |  |                 |  |  |              |  |  |            |  |  |        |  |  |            |   |  |            |  |  |               |   |  |             |   |  |            |  
|Issuance of stock for cash at     |  |                 |  |  |              |  |  |            |  |  |        |  |  |            |   |  |            |  |  |               |   |  |             |   |  |            |  
|$0.25 per share                   |  |                |  |  |             |  |  | 2,596,000  |  |  | 26     |  |  | 648,974    |   |  |           |  |  |              |   |  |            |   |  | 649,000    |  
|                                  |  |                 |  |  |              |  |  |            |  |  |        |  |  |            |   |  |            |  |  |               |   |  |             |   |  |            |  
|Issuance of stock for cash at     |  |                 |  |  |              |  |  |            |  |  |        |  |  |            |   |  |            |  |  |               |   |  |             |   |  |            |  
|$0.30 per share                   |  |                |  |  |             |  |  | 166,667    |  |  | 2      |  |  | 49,998     |   |  |            |  |  |               |   |  |             |   |  | 50,000     |  
|                                  |  |                 |  |  |              |  |  |            |  |  |        |  |  |            |   |  |            |  |  |               |   |  |             |   |  |            |  
|Issuance of shares pursuant to    |  |                 |  |  |              |  |  |            |  |  |        |  |  |            |   |  |            |  |  |               |   |  |             |   |  |            |  
|mineral property agreement        |  |                |  |  |             |  |  | 515,000    |  |  | 5      |  |  | 172,945    |   |  |           |  |  |              |   |  |            |   |  | 172,950    |  
|                                  |  |                 |  |  |              |  |  |            |  |  |        |  |  |            |   |  |            |  |  |               |   |  |             |   |  |            |  
|Issuance of shares to settle      |  |                 |  |  |              |  |  |            |  |  |        |  |  |            |   |  |            |  |  |               |   |  |             |   |  |            |  
|debt                              |  |                |  |  |             |  |  | 400,000    |  |  | 4      |  |  | 99,996     |   |  |           |  |  |              |   |  |            |   |  | 100,000    |  
|                                  |  |                 |  |  |              |  |  |            |  |  |        |  |  |            |   |  |            |  |  |               |   |  |             |   |  |            |  
|Issuance of shares to settle      |  |                 |  |  |              |  |  |            |  |  |        |  |  |            |   |  |            |  |  |               |   |  |             |   |  |            |  
|related party debt                |  |                |  |  |             |  |  | 21,200     |  |  |       |  |  | 5,300      |   |  |           |  |  |              |   |  |            |   |  | 5,300      |  
|                                  |  |                 |  |  |              |  |  |            |  |  |        |  |  |            |   |  |            |  |  |               |   |  |             |   |  |            |  
|Issuance of shares to settle      |  |                 |  |  |              |  |  |            |  |  |        |  |  |            |   |  |            |  |  |               |   |  |             |   |  |            |  
|convertible debentures            |  |                |  |  |             |  |  | 1,376,936  |  |  | 13     |  |  | 344,221    |   |  |           |  |  |              |   |  |            |   |  | 344,234    |  
|                                  |  |                 |  |  |              |  |  |            |  |  |        |  |  |            |   |  |            |  |  |               |   |  |             |   |  |            |  
|Intrinsic value of beneficial     |  |                 |  |  |              |  |  |            |  |  |        |  |  |            |   |  |            |  |  |               |   |  |             |   |  |            |  
|conversion features               |  |                |  |  |             |  |  |           |  |  |       |  |  | 254,749    |   |  |           |  |  |              |   |  |            |   |  | 254,749    |  
|                                  |  |                 |  |  |              |  |  |            |  |  |        |  |  |            |   |  |            |  |  |               |   |  |             |   |  |            |  
|Net loss for
      the year       |  |                |  |  |             |  |  |           |  |  |       |  |  |           |   |  |           |  |  |              |   |  | (2,177,278  | ) |  | (2,177,278 | )
|                                  |  |                 |  |  |              |  |  |            |  |  |        |  |  |            |   |  |            |  |  |               |   |  |             |   |  |            |  
|Balance  June
      30, 2007     |  | 500,000         |  |  | 5            |  |  | 70,781,399 |  |  | 708    |  |  | 14,769,378 |   |  |           |  |  |              |   |  | (15,859,968 | ) |  | (1,089,877 | )

The Accompanying Notes are an Integral Part of These Financial
  Statements
  F-7

---

Canyon Copper Corp.
  (formerly Aberdene Mines Limited)
  (An Exploration Stage Company)
  Notes to the Financial Statements
  (Expressed in U.S. dollars)

|1. | Nature of Operations and Continuance of Business                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   | Canyon Copper Corp., (the Company),
        was incorporated in the State of Nevada, U.S.A. on January 21, 2000 under
        the name Aberdene Mines Limited. On August 7, 2006, the Company changed
        its name to Canyon Copper Corp. The Company is an Exploration Stage Company,
        as defined by Statement of Financial Accounting Standard (SFAS)
        No. 7 Accounting and Reporting by Development Stage Enterprises.
        The Companys principal business plan is to acquire, explore and
        develop mineral properties and ultimately seek earnings by exploiting
        mineral claims.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   | The Company has been in the exploration stage
        since its formation in January 2000 and has not yet realized any revenues
        from its planned operations. It is primarily engaged in the acquisition,
        exploration and development of mineral properties. Upon location of a
        commercial mineable reserve, the Company will actively prepare the site
        for extraction and enter a development stage. At present, management devotes
        most of its activities to raise sufficient funds to further explore and
        develop its mineral properties. Planned principal activities have not
        yet begun. The ability of the Company to emerge from the exploration stage
        with respect to any planned principal business activity is dependent upon
        its successful efforts to raise additional equity financing and/or attain
        profitable mining operations. As at June 30, 2007, the Company has a working
        capital deficit of $1,089,877 and has accumulated losses of $15,859,968
        since inception. The Company also has significant mineral property acquisition
        and exploration commitments. There is no guarantee that the Company will
        be able to complete any of the above objectives. These factors raise substantial
        doubt regarding the Companys ability to continue as a going concern.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   | Managements plan for the next twelve
        months is to continue initial exploration activities on the New York Canyon
        Project in Nevada. The agreements pursuant to which the Company acquired
        its interests in the New York Canyon Project provide for a series of cash
        payments, the issue of certain shares over certain time periods, and the
        expenditure of certain minimum amounts on the exploration of the properties
        or contribute its share of ongoing expenditures. If the Company fails
        to make such payments or expenditures in a timely fashion it may lose
        its interest in those properties. As at June 30, 2007, the Company had
        cash of $34,401 on hand, and for the next twelve months, management anticipates
        that the minimum cash requirements to fund its proposed exploration program
        and continued operations will be $2,875,000. Accordingly, the Company
        does not have sufficient funds to meet planned expenditures over the next
        twelve months, and will need to seek additional debt or equity financing
        to meet its planned expenditures. There is no assurance that the Company
        will be able to raise sufficient cash to fund its future exploration programs
        and operational expenditures.                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|2. | Summary of Significant Accounting Policies                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   | a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   | b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   | c)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             

F-8

---

Canyon Copper Corp.
  (formerly Aberdene Mines Limited)
  (An Exploration Stage Company)
  Notes to the Financial Statements
  (Expressed in U.S. dollars)

|2. | Summary of Significant Accounting Policies
        (continued)
|-- | --------------------------------------------------------------
|   |                                                               
|   | d)                                                            
|   |                                                               
|   |                                                               
|   |                                                               
|   |                                                               
|   |                                                               
|   | e)                                                            
|   |                                                               
|   |                                                               
|   |                                                               
|   | f)                                                            
|   |                                                               
|   |                                                               
|   |                                                               
|   |                                                               
|   |                                                               
|   | g)                                                            
|   |                                                               
|   |                                                               

F-9

---

Canyon Copper Corp.
  (formerly Aberdene Mines Limited)
  (An Exploration Stage Company)
  Notes to the Financial Statements
  (Expressed in U.S. dollars)

|2. | Summary of Significant Accounting Policies
        (continued)
|-- | --------------------------------------------------------------
|   |                                                               
|   | h)                                                            
|   |                                                               
|   |                                                               
|   |                                                               
|   | i)                                                            
|   |                                                               
|   |                                                               
|   |                                                               
|   | j)                                                            
|   |                                                               
|   |                                                               
|   |                                                               
|   | k)                                                            
|   |                                                               
|   |                                                               
|   |                                                               
|   | l)                                                            
|   |                                                               
|   |                                                               
|   |                                                               
|   | m)                                                            
|   |                                                               
|   |                                                               

F-10

---

Canyon Copper Corp.
  (formerly Aberdene Mines Limited)
  (An Exploration Stage Company)
  Notes to the Financial Statements
  (Expressed in U.S. dollars)

|2. | Summary of Significant Accounting Policies
        (continued)
|-- | --------------------------------------------------------------
|   |                                                               
|   | n)                                                            
|   |                                                               
|   |                                                               
|   |                                                               
|   |                                                               
|   |                                                               
|   | o)                                                            
|   |                                                               
|   |                                                               
|   |                                                               
|   | p)                                                            
|   |                                                               
|   |                                                               
|   |                                                               
|   |                                                               

F-11

---

Canyon Copper Corp.
  (formerly Aberdene Mines Limited)
  (An Exploration Stage Company)
  Notes to the Financial Statements
  (Expressed in U.S. dollars)

|2. | Summary of Significant Accounting Policies
        (continued)
|-- | --------------------------------------------------------------
|   |                                                               
|   | p)                                                            
|   |                                                               
|   |                                                               

In June 2006, the FASB issued FASB Interpretation
  No. 48, Accounting for Uncertainty in Income Taxes, an interpretation
  of FASB Statements No. 109 (FIN 48). FIN 48 clarifies the
  accounting for uncertainty in income taxes by prescribing a two-step method
  of first evaluating whether a tax position has met a more likely than not recognition
  threshold and second, measuring that tax position to determine the amount of
  benefit to be recognized in the financial statements. FIN 48 provides guidance
  on the presentation of such positions within a classified statement of financial
  position as well as on derecognition, interest and penalties, accounting in
  interim periods, disclosure, and transition. FIN 48 is effective for fiscal
  years beginning after December 15, 2006. The adoption of this statement is not
  expected to have a material effect on the Company's future reported financial
  position or results of operations.

In March 2006, the FASB issued SFAS
  No. 156, "Accounting for Servicing of Financial Assets, an amendment of FASB
  Statement No. 140, Accounting for Transfers and Servicing of Financial Assets
  and Extinguishments of Liabilities". This statement requires all separately
  recognized servicing assets and servicing liabilities be initially measured
  at fair value, if practicable, and permits for subsequent measurement using
  either fair value measurement with changes in fair value reflected in earnings
  or the amortization and impairment requirements of Statement No. 140. The subsequent
  measurement of separately recognized servicing assets and servicing liabilities
  at fair value eliminates the necessity for entities that manage the risks inherent
  in servicing assets and servicing liabilities with derivatives to qualify for
  hedge accounting treatment and eliminates the characterization of declines in
  fair value as impairments or direct write-downs. SFAS No. 156 is effective for
  an entity's first fiscal year beginning after September 15, 2006. The adoption
  of this statement is not expected to have a material effect on the Company's
  future reported financial position or results of operations.

In February 2006, the FASB issued SFAS
  No. 155, "Accounting for Certain Hybrid Financial Instruments-an amendment of
  FASB Statements No. 133 and 140", to simplify and make more consistent the accounting
  for certain financial instruments. SFAS No. 155 amends SFAS No. 133, "Accounting
  for Derivative Instruments and Hedging Activities", to permit fair value re-measurement
  for any hybrid financial instrument with an embedded derivative that otherwise
  would require bifurcation, provided that the whole instrument is accounted for
  on a fair value basis. SFAS No. 155 amends SFAS No. 140, "Accounting for the
  Impairment or Disposal of Long-Lived Assets", to allow a qualifying special-purpose
  entity to hold a derivative financial instrument that pertains to a beneficial
  interest other than another derivative financial instrument. SFAS No. 155 applies
  to all financial instruments acquired or issued after the beginning of an entity's
  first fiscal year that begins after September 15, 2006, with earlier application
  allowed. The adoption of this statement is not expected to have a material effect
  on the Company's future reported financial position or results of operations.

|3. | Property and Equipment
|-- | ----------------------

| |                    |  |        |  |  |              |  |  |            |  |  | June 30,     |  |  | June 30,     | 
| | ------------------ |  | ------ |  |  | ------------ |  |  | ---------- |  |  | ------------ |  |  | ------------ | 
| |                    |  |        |  |  |              |  |  |            |  |  | 2007         |  |  | 2006         | 
| |                    |  |        |  |  | Accumulated  |  |  | Impairment |  |  | Net Carrying |  |  | Net Carrying | 
| |                    |  | Cost   |  |  | Amortization |  |  | Loss       |  |  | Value        |  |  | Value        | 
| |                    |  | $      |  |  | $            |  |  | $          |  |  | $            |  |  | $            | 
| |                    |  |        |  |  |              |  |  |            |  |  |              |  |  |              | 
| | Computer equipment |  | 6,229  |  |  | 4,084        |  |  | 2,145      |  |  |             |  |  | 2,145        | 
| | Office furniture   |  | 10,122 |  |  | 1,456        |  |  | 8,666      |  |  |             |  |  | 8,666        | 
| |                    |  |        |  |  |              |  |  |            |  |  |              |  |  |              | 
| |                    |  | 16,351 |  |  | 5,540        |  |  | 10,811     |  |  |             |  |  | 10,811       | 

F-12

---

Canyon Copper Corp.
  (formerly Aberdene Mines Limited)
  (An Exploration Stage Company)
  Notes to the Financial Statements
  (Expressed in U.S. dollars)

|4. | Mineral Properties 
|-- | -------------------
|   |                    
|   | a)                 
|   |                    
|   | b)                 
|   |                    
|5. | Accrued Liabilities

| |                                      |   | June 30, |  |   | June 30, | 
| | ------------------------------------ | - | -------- |  | - | -------- | 
| |                                      |   | 2007     |  |   | 2006     | 
| |                                      | $ |          |  | $ |          | 
| |                                      |   |          |  |   |          | 
| | Interest accrued on debt             |   | 48,980   |  |   | 37,579   | 
| | Mineral exploration expenditures     |   |         |  |   | 181,277  | 
| | Professional fees and other accruals |   | 15,849   |  |   | 2,050    | 
| |                                      |   |          |  |   |          | 
| |                                      |   | 64,829   |  |   | 220,906  | 

|6. | Related Party Transactions
|-- | --------------------------
|   |                           
|   | a)                        
|   |                           
|   | b)                        
|   |                           
|   | c)                        
|   |                           
|   | d)                        

F-13

---

Canyon Copper Corp.
  (formerly Aberdene Mines Limited)
  (An Exploration Stage Company)
  Notes to the Financial Statements
  (Expressed in U.S. dollars)

|6. | Related Party Transactions (continued)
|-- | --------------------------------------
|   |                                       
|   | e)                                    
|   |                                       
|   | f)                                    
|   |                                       
|   | g)                                    
|   |                                       
|7. | Loans Payable                         
|   |                                       
|   | a)                                    
|   |                                       
|   | b)                                    
|   |                                       
|8. | Convertible Debt                      
|   |                                       
|   | a)                                    
|   |                                       
|   | b)                                    

F-14

---

Canyon Copper Corp.
  (formerly Aberdene Mines Limited)
  (An Exploration Stage Company)
  Notes to the Financial Statements
  (Expressed in U.S. dollars)

|8. | Convertible Debt (continued)
|-- | ----------------------------

On November 27, 2006, the convertible
  loans were amended to modify the conversion privileges and the maturity date
  for the APF loan was extended to April 11, 2007 and the Aton loan was extended
  to April 12, 2007. The loans are convertible into units at the lessor of $0.30
  per unit or the closing price of the Companys shares on the business day
  preceding the date that the Company receives a notice of conversion. Each unit
  will consist of one share of common stock and one half of a share purchase warrant.
  Each whole share purchase warrant is exercisable at $0.40 per common share for
  a period of one year from the date of issuance. In accordance with EITF 05-7
  Accounting for Modifications to Conversion Options Embedded in Debt Instruments
  and Related Issues and EITF 96-19 Debtors Accounting for a
  Modification or Exchange of Debt Instruments, (EITF 96-19)
  the Company deemed the terms of the amendment to be substantially different
  and treated the original convertible loans extinguished and exchanged for new
  convertible loans. The Company determined that the conversion feature of the
  convertible loans met the criteria of an embedded derivative and therefore the
  conversion features of the loans needed to be bifurcated and accounted for as
  a derivative. The Company recorded accretion of the discount of $148,077 up
  to November 27, 2006. On November 27, 2006, the Company recognized the difference
  of $44,843 between the fair value of the conversion feature before and after
  the amendment. The Company will adjust the carrying value of the conversion
  feature to its fair value at each reporting date.

On April 11, 2007, the maturity date
  of the APF loan was extended to October 11, 2007 and on April 12, 2007 the maturity
  date of the Aton loan was extended to October 12, 2007. In accordance with EITF
  06-6 Debtors Accounting for a Modification or Exchange of (Convertible)
  Debt Instruments, the Company determined it should not apply extinguishment
  accounting as the fair value of the embedded conversion option was not greater
  than 10% of the carrying amount of the original debt instrument immediately
  prior to the modification. On June 30, 2007, the Company recognized a gain on
  the change in the fair values of the conversion features of $3,641 and decreased
  the derivative liability to $41,201. To June 30, 2007, the Company recorded
  accretion of the discount of $71,766 increasing the carrying value of the convertible
  loans to $500,000. The outstanding amounts under the loans may be repaid, in
  whole or in part, at any time at the option of Company without penalty. For
  as long as the loans remain outstanding the Company has agreed not to mortgage,
  pledge or otherwise encumber its interest in its minerals claims in the State
  of Nevada without the consent of its lenders. Proceeds of the loans are to be
  used for working capital purposes to fund the Companys continued operations.

| | c) | On March 20, 2007, the Company received a loan of $120,000
        from Aton Select Fund Limited. The loan bears interest at a rate of 15%
        per annum, was unsecured and due on demand. On April 25, 2007, the Company
        secured this loan by issuing a convertible note. The note is due on March
        20, 2008 and is convertible at $0.30 per unit with each unit to consist
        of one common share and one share purchase warrant exercisable at $0.40
        per common shares for a period of two years. In accordance with EITF 98-5,
        the Company recognized the intrinsic value of the embedded beneficial
        conversion feature of $36,041 as additional paid-in capital and an equivalent
        discount which will be expensed over the term of the convertible loans.
        To June 30, 2007, the Company recorded accretion of the discount of $7,206,
        increasing the carrying value of the convertible loan to $91,165. The
        carrying value of the convertible loan will be accreted to the face value
        of $120,000 to maturity.
| | -- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

F-15

---

Canyon Copper Corp.
  (formerly Aberdene Mines Limited)
  (An Exploration Stage Company)
  Notes to the Financial Statements
  (Expressed in U.S. dollars)

|8. | Convertible Debt (continued)
|-- | ----------------------------
|   |                             
|   | d)                          
|   |                             
|   |                             
|   |                             
|   |                             
|   |                             
|   |                             
|   |                             
|   |                             
|   |                             
|   |                             
|   |                             
|   |                             

F-16

---

Canyon Copper Corp.
  (formerly Aberdene Mines Limited)
  (An Exploration Stage Company)
  Notes to the Financial Statements
  (Expressed in U.S. dollars)

|9. | Common Stock                     
|-- | ---------------------------------
|   |                                  
|   | For the year ended June 30, 2007:
|   |                                  
|   | a)                               
|   |                                  
|   | b)                               
|   |                                  
|   | c)                               
|   |                                  
|   | d)                               
|   |                                  
|   | e)                               
|   |                                  
|   | f)                               
|   |                                  
|   | g)                               
|   |                                  
|   | h)                               
|   |                                  
|   | i)                               
|   |                                  
|   | For the year ended June 30, 2006:
|   |                                  
|   | a)                               
|   |                                  
|   | b)                               
|   |                                  
|   | c)                               
|   |                                  
|   | d)                               
|   |                                  
|   | e)                               
|   |                                  
|   | f)                               

F-17

---

Canyon Copper Corp.
  (formerly Aberdene Mines Limited)
  (An Exploration Stage Company)
  Notes to the Financial Statements
  (Expressed in U.S. dollars)

|9.  | Common Stock (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|    | For the year ended June 30, 2006:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|    | g)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|    | h)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|10. | Stock Options                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|    | On April 5, 2006, the Company established
        a 2006 Stock Incentive Plan (the 2006 Plan) to issue up to
        a maximum of 10,000,000 shares of common stock. The maximum aggregate
        number of shares of common stock that may be optioned and sold under the
        2006 Plan will be increased effective the first day of each of the Companys
        fiscal quarters commencing April 1, 2006, by an amount equal the lesser
        of (i) 15% of the total increase in the number of shares of common stock
        outstanding during the previous fiscal quarter, or (ii) a lesser number
        of shares of common stock as determined by the board of directors. The
        exercise price for consultants cannot be less than 75% of the fair market
        value of the common stock on the grant date. The exercise price for all
        others can not be less than 100% of the fair market value of the common
        stock on the grant date for incentive stock options and can not be less
        than 75% of the fair market value of the common stock on the grant date
        for non-qualified stock options. The Plan Administrator shall establish
        the option term or, if not so established, shall be ten years from the
        grant date. As at June 30, 2007, the Company had 2,423,750 stock options
        available for granting pursuant to the 2006 Plan.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|    | The Companys 2004 Non-qualified Stock
        Option Plan (the 2004 Plan) is intended to provide incentives
        to employees, directors and consultants by providing them with opportunities
        to purchase shares of our common stock. The 2004 Plan is effective as
        of June 17, 2004 and all stock options granted under the 2004 Plan must
        be granted within ten years from the date the 2004 Plan was adopted. The
        Company originally registered the 2004 Plan on June 17, 2004 pursuant
        to a registration statement on Form S-8. Effective April 6, 2005, the
        Company amended the 2004 Plan and increased the total of common shares
        reserved for issuance under the 2004 Plan from one million to a total
        of four million common shares. The Board of Directors is authorized to
        administer the 2004 Plan. In doing so, the Board of Directors may: (i)
        designate optionees; (ii) determine the terms and provisions of respective
        option agreements (which need not be identical) including, but not limited
        to, the number of shares to be covered by each option, provisions concerning
        the time or times when and the extent to which the options may be exercised,
        and the nature and duration of restrictions as to transferability or restrictions
        constituting substantial risk of forfeiture; (iii) accelerate the right
        of an optionee to exercise, in whole or in part, any previously granted
        option; (iv) interpret the provisions and supervise the administration
        of the 2004 Plan; (v) determine the fair market value of shares issuable
        under the 2004 Plan; (vi) designate the type of options to be granted
        to an optionee; and (vii) determine any other matter which is necessary
        or desirable for, or incidental to, the administration of the 2004 Plan.
        As at June 30, 2007, the Company had 2,500,000 stock options available
        for granting pursuant to the 2004 Plan.

A summary of the Companys stock
  option activity is as follows:

| |                                  |  |            |   |  | Weighted       |  |  |                 | 
| | -------------------------------- |  | ---------- | - |  | -------------- |  |  | --------------- | 
| |                                  |  |            |   |  | Average        |  |  | Aggregate       | 
| |                                  |  | Number of  |   |  | Exercise Price |  |  | Intrinsic Value | 
| |                                  |  | Options    |   |  | $              |  |  | $               | 
| | Outstanding, June 30, 2005       |  | 3,000,000  |   |  | 0.30           |  |  |                 | 
| | Granted                          |  | 8,550,000  |   |  | 0.50           |  |  |                 | 
| | Exercised                        |  | (150,000   | ) |  | 0.35           |  |  |                 | 
| | Outstanding, June 30, 2006       |  | 11,400,000 |   |  | 0.45           |  |  |                 | 
| | Exercised                        |  | (200,000   | ) |  | 0.50           |  |  |                 | 
| | Forfeited                        |  | (2,500,000 | ) |  | 0.38           |  |  |                 | 
| | Outstanding, June 30, 2007       |  | 8,700,000  |   |  | 0.47           |  |  | 15,000          | 
| | Exercisable, June
      30, 2007 |  | 8,700,000  |   |  | 0.47           |  |  | 15,000          | 

F-18

---

Canyon Copper Corp.
  (formerly Aberdene Mines Limited)
  (An Exploration Stage Company)
  Notes to the Financial Statements
  (Expressed in U.S. dollars)

|10. | Stock Options (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|    | As at June 30, 2007, the weighted average remaining
        contractual life of the outstanding stock options is 2.47 years.                                                                                                                                                                                                                                                                                                                                                               
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|    | As at June 30, 2007 and June 30, 2006, the Company had
        no unvested options outstanding.                                                                                                                                                                                                                                                                                                                                                                                            
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|    | During the years ended June 30, 2007 and 2006, the Company
        recorded stock-based compensation of $nil and $3,229,195, respectively,
        as general and administrative expense.                                                                                                                                                                                                                                                                                                  
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|    | The fair value of the stock options granted during the
        year ended June 30, 2006 was estimated at the date of grant using the
        Black-Scholes option pricing model using the following weighted average
        assumptions: risk free interest rate of 4.71%, expected volatility of
        144%, an expected option life of 1.88 years and no expected dividends.
        The weighted average grant date fair value of stock options granted was
        $0.38 per option.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|11. | Share Purchase Warrants                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|    | The following table summarizes the continuity of the
        Companys share purchase warrants:                                                                                                                                                                                                                                                                                                                                                                                            

| |                              |  |           |  |  | Weighted | 
| | ---------------------------- |  | --------- |  |  | -------- | 
| |                              |  |           |  |  | average  | 
| |                              |  |           |  |  | exercise | 
| |                              |  | Number of |  |  | price    | 
| |                              |  | Warrants  |  |  | $        | 
| | Balance, June 30, 2005       |  |           |  |  |          | 
| | Issued                       |  | 4,475,000 |  |  | 0.50     | 
| | Balance, June 30, 2006       |  | 4,475,000 |  |  | 0.50     | 
| | Issued                       |  | 4,560,803 |  |  | 0.30     | 
| | Balance, June 30,
      2007 |  | 9,035,803 |  |  | 0.40     | 

As at June 30, 2007, the following share
  purchase warrants were outstanding:

ExerciseNumber of
      PriceWarrants
      $
      Expiry Date1,000,000
      0.30
      December 31, 20074,475,000
      0.50
      February 28, 20081,226,666
      0.30
      February 28, 20082,234,136
      0.30
      June 29, 2008166,667
      0.40
      August 28, 20089,035,803


|12. | Commitments and Contingencies
|--- | -----------------------------
|    |                              
|    | a)                           

F-19

---

Canyon Copper Corp.
  (formerly Aberdene Mines Limited)
  (An Exploration Stage Company)
  Notes to the Financial Statements
  (Expressed in U.S. dollars)

|12. | Commitments and Contingencies (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|    | b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|    | c)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|13. | Income Taxes                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|    | The Company has net operating losses carried
        forward of approximately $8,350,200 available to offset taxable income
        in future years which expire beginning in fiscal 2020. Pursuant to SFAS
        109, the potential benefits of the net operating loss carry forward has
        not been recognized in the financial statements since the Company cannot
        be assured that it is more likely than not that such benefit will be utilized
        in future years.

The Company is subject to United States
  federal and state income taxes at an approximate rate of 35%. The reconciliation
  of the provision for income taxes at the United States federal statutory rate
  compared to the Companys income tax expense as reported is as follows:

| |                                          |   | Year Ended |   |   | Year Ended |  
| | ---------------------------------------- | - | ---------- | - | - | ---------- | -
| |                                          |   | June 30,   |   |   | June 30,   |  
| |                                          |   | 2007       |   |   | 2006       |  
| |                                          | $ |            |   | $ |            |  
| | Income tax benefit at the statutory rate |   | (762,047   | ) |   | (2,692,248 | )
| | Permanent differences                    |   | 244,328    |   |   | 1,280,223  |  
| | Temporary differences                    |   |           |   |   | 1,237      |  
| | Valuation allowance
      change         |   | 517,719    |   |   | 1,410,788  |  
| | Provision for income taxes               |   |           |   |   |           |  

The significant components of deferred
  income tax assets and liabilities as at June 30, 2007 and 2006 are as follows:

| |                                      |  | June 30,   |   |  | June 30,   |  
| | ------------------------------------ |  | ---------- | - |  | ---------- | -
| |                                      |  | 2007       |   |  | 2006       |  
| |                                      |  | $          |   |  | $          |  
| | Net operating losses carried forward |  | 2,930,208  |   |  | 2,412,488  |  
| | Valuation allowance                  |  | (2,930,208 | ) |  | (2,412,488 | )
| | Net deferred income tax asset        |  |           |   |  |           |  

The Company has recognized a valuation
  allowance for the deferred income tax asset since the Company cannot be assured
  that it is more likely than not that such benefit will be utilized in future
  years. The valuation allowance is reviewed annually. When circumstances change
  and which cause a change in management's judgment about the realizability of
  deferred income tax assets, the impact of the change on the valuation allowance
  is generally reflected in current income.

F-20

---

Canyon Copper Corp.
  (formerly Aberdene Mines Limited)
  (An Exploration Stage Company)
  Notes to the Financial Statements
  (Expressed in U.S. dollars)

|14. | Subsequent Event                                                                                                                                                                                                                                                                                                                      
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                       
|    | On August 15, 2007, the Company issued 1,200,000 units
        for proceeds of $300,000. Each unit consisted of one share of common stock
        and one share purchase warrant. Each share purchase warrant is exercisable
        at a price of $0.30 per common share for a period of two years from the
        date of issuance.

F-21

---

|ITEM 8. | CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
      ACCOUNTING AND **FINANCIAL DISCLOSURE.**
|------- | -----------------------------------------------------------------------------------------------

None.

|ITEM 8A. | CONTROLS AND PROCEDURES.
|-------- | ------------------------

Under the supervision and with the participation of our
management, including the Chief Executive Officer and Chief Financial Officer,
we have evaluated the effectiveness of our disclosure controls and procedures as
required by Exchange Act Rule 13a-15(b) as of the end of the period covered by
this report. Based on that evaluation, the Chief Executive Officer and Chief
Financial Officer has concluded that these disclosure controls and procedures
are effective.

There were no changes in our internal control over financial
reporting during the year ended June 30, 2007 that have materially affected, or
are reasonably likely to materially affect, our internal control over financial
reporting.

|ITEM 8B. | OTHER INFORMATION.
|-------- | ------------------

On September 25, 2007, we entered into a termination agreement
(the Termination Agreement) with Mark Reynolds, pursuant to which our
consulting agreement dated January 19, 2006 was terminated. In accordance with
the terms of the Termination Agreement, we agreed to pay Mr. Reynolds all unpaid
consulting fees upon the earlier of two years from the date of the termination
agreement, or upon our completing financing with minimum net proceeds of
$2,000,000. Also, Mr. Reynolds agreed to waive all consulting fees payable to
him for the period from July 1, 2007 to September 25, 2007.

30

---

PART III

|ITEM 9. | DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS,
      CONTROL PERSONS AND **CORPORATE GOVERNANCE;
      COMPLIANCE WITH** SECTION 16(A) OF THE
      **EXCHANGE ACT.**
|------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------

Our executive officers and directors and their respective ages
and titles as of September 28, 2007 are as follows:

NAME AND ADDRESS OF DIRECTOR / OFFICER
    AGE
    POSITIONAnthony Harvey Ste. 408  1199 West Pender Street
      Vancouver, British Columbia, Canada V6E 2R1
    73
    Director, Chairman and Chief Executive OfficerBryan Wilson 84 Cedarcrest Crescent Richmond Hill,
      Ontario, Canada L4S 2P4
    57
    Director, President and TreasurerKurt Bordian #408  1199 West Pender Street Vancouver
      British Columbia, Canada V6E 2R1
    39
    Chief Financial OfficerBenjamin Ainsworth #408  1199 West Pender Street
      Vancouver British Columbia, Canada V6E 2R1
    66
    Director And SecretaryJohn Carlesso Suite 815  65 Queen St. W. Toronto,
      Ontario Canada M4S 2E5
    43
    DirectorMilton Datsopoulos Suite 201  201 West Main Street
      Missoula, MT 59802
    67
    Director


Set forth below is a brief description of the background and
business experience of our executive officers and directors for the past five
years:

Anthony Harvey(Director, Chairman, and Chief Executive
Officer): On May 30, 2006, Mr. Anthony Harvey was appointed as our Chairman,
Chief Executive Officer and as a member of our Board of Directors. Mr. Harvey
has over 40 years of consulting experience on numerous mining projects
internationally with capital costs ranging up to and exceeding $400 million. Mr.
Harvey has spent 30 years working with Wright Engineers Ltd.  Fluor Daniels in
various management positions, including Senior Project Manager, involved in the
design and construction of 14 mines world wide on behalf of major mining
corporations.

Mr. Harvey is presently the founder and board member of ARH
Management Limited, which has provided management and consulting services to the
resource industry. Also, Mr. Harvey is a director of Terra Energy Inc.
(TTR-TSX.V), a petroleum and natural gas company based in Calgary, Alberta, and
chairman and a director of ESO Uranium Corp. (ESO-TSX.V), a uranium exploration
company with properties located in Saskatchewan and Northeastern Ontario.

Mr. Harvey is also a former founder, president and chairman of
Azco Mining Inc. (AZMN-OTCBB), former founder, chairman and director of Oremex
Resources Inc. (ORM- TSX.V), and former chairman and director of Lakeshore Gold
Corp. (LSG-TSX). Mr. Harvey has provided consulting services to Canyon Copper
since April 2005 pursuant to a consulting agreement dated as of April 1, 2005.

Bryan Wilson (Director, President and Treasurer):
Effective March 6, 2006, Bryan Wilson was appointed as a member of our Board of
Directors. Effective May 30, 2006, Mr. Wilson was also appointed as our
President and Treasurer.

Mr. Wilson has worked in the fields of mining exploration and
development for 18 years and financial services for 12 years. He has filled
various roles such as Project Geologist/Manager for Shell Canada; Consultant,

31

---

Financial Advisor for Scotia McLeod; Mining Analyst for C.M.
Oliver; and Corporate Finance Specialist for Dominick & Dominick and Thames
Capital. He is currently responsible for our executive management functions,
including regulatory filing and our day-to-day administrative operations. Within
the mining industry, Mr. Wilson has acquired broad international exposure to a
variety of mineral commodities and has worked throughout the world. In 1981,
Shell Canada's East Kemptville Tin Mine which was discovered and developed under
his supervision (50.0 million tonnes @ 0.23% Tin).

Mr. Wilson is currently the President, CEO and director of Ste.
Genevieve Resources Ltd. (SGVL-CNQ), STGIF-OTCBB), a mining exploration and
development company. Since 1999, Mr. Wilson has acted as a director of Spider
Resources Inc. (SPQ-TSX.V).

Kurt Bordian (Chief Financial Officer): On January 6,
2006, Mr. Kurt Bordian was appointed as our Chief Financial Officer. Mr. Bordian
is responsible for our financial management functions. He has worked primarily
in the mineral exploration and oil and gas industries over the past 10 years,
and has held the position of controller with three public companies exploring
and operating in the Solomon Islands, Ghana, Tunisia and Western Canada. Mr.
Bordian is also active with other public entities as operations manager and
corporate secretary.

From 1996 to 2000, Mr. Bordian held the position of controller
for Leigh Resource Corp. located in Vancouver, British Columbia. From July 2000
to August 2001, Mr. Bordian was a controller for Insurance Replacement Centre of
Vancouver, British Columbia. From September 2001 to October 2003, Mr. Bordian
worked as a self-employed accountant. Since November 2004, Mr. Bordian has been
a controller for Bishop Gold Inc. located in Vancouver, British Columbia. From
July 2005 to March 2007, Mr. Bordian was Chief Financial Officer, corporate
secretary and a director of Calypso Acquisition Corp. (CLP-TSX.V). Mr. Bordian
has been Chief Financial Officer of ESO Uranium Corp. (ESO-TSX.V) since November
2006. Mr. Bordian has been a director of Bordeau Energy Inc. (BDO-TSX.V) since
July 2006 and Chief Financial Officer from July 2006 to September 2006. Mr.
Bordian has also been a director of Centillon Industries Inc. (CID.H-NEX) since
August 2006 and former Chief Financial Officer from August 2006 to September
2006.

Mr. Bordian is a Certified General Accountant in Canada, and
holds a Bachelor of Commerce (Honors) Degree from the University of Manitoba.

Benjamin Ainsworth(Director and Secretary): On May 30,
2006, Mr. Benjamin Ainsworth was appointed as our Secretary and a member of our
Board of Directors. Mr. Ainsworth is a senior geologist and mining consultant
who has been involved in the mining industry for over thirty-five years.

Mr. Ainsworth joined Place Development in 1965 and held
positions of Senior Geologist, Chief Geochemist, Exploration Manager  Easter
Canada, Exploration Manager  Chile, and President  Place Chile, South America.
Throughout the 1970s, Mr. Ainsworth was involved in the design, budgeting and
implementation of exploration programs that included large and small drill
programs, geophysical surveys, geological mapping, geochemical surveys, and a
full range of project evaluation studies. He is a registered Professional
Engineer in the Province of British Columbia, Canada, and is a Canadian citizen
by naturalization. Mr. Ainsworth is also senior geologist and mining consultant
and principal of Ainsworth Jenkins Holdings Inc. and director of several
reporting companies including ESO Uranium Corp. (ESO-TSX.V), BHR Buffalo Head
Resources Ltd. (BHR.H.-NEX), Columbia Yukon Explorations Inc. (CYU-TSX.V),
Consolidated Venturex Holdings Ltd. (CVA-TSX.V) and Sultan Minerals Inc.
(SUL-TSX.V).

John Carlesso (Director): On February 22, 2006, Mr. John
Carlesso was appointed as a member of our Board of Directors. Mr. Carlesso is a
senior executive with over 15 years of international business and financial
markets experience.

Mr. Carlesso is currently president of Apogee Minerals Ltd.
(Apogee) (APE-TSX.V), a Canadian mining and exploration company developing
advanced Silver-Zinc projects in South America. Apogee is focused on projects
that offer significant exploration upside with the potential to be rapidly
developed into producing assets. Apogee currently has a focus in the historic
silver producing regions of Bolivia. Mr. Carlesso held the position of vice
president, Corporate Development with Desert Sun Mining Corp., a gold mining and
exploration company listed on the Toronto Stock Exchange and the American Stock
Exchange. From August 2000 to September 2003, Mr. Carlesso was in Investor
Relations and a director of Kasten Chase Applied Resources located in
Mississauga, Ontario. Kasten Chase Applied Resources is in the business of data

32

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security. Previously, he provided capital markets, corporate
finance, and strategic marketing advice to growth-oriented companies, both
public and private, across a broad range of sectors. He has also held positions
in the Institutional and Private Client divisions at some of Canada's largest
investment dealers. Mr. Carlesso holds a Bachelor of Economics degree from the
University of Western Ontario.

Milton Datsopoulos (Director): Mr. Datsopoulos joined
our Board of Directors on July 1, 2004 and served as Chairman of the Board from
April 12, 2005 to May 30, 2006. Mr. Datsopoulos is the founder of and partner in
Datsopoulos, MacDonald, and Lind, P.C., a multi-disciplinary law firm located in
Missoula, Montana which specializes in business, environmental, and
transportation law with a U.S. and international clientele. He has served on and
continues to serve as a Genutec board member and director of numerous business
organizations including public and private companies, including Montana Rail
Link, Leigh Resource Corporation, Montana World Trade Center, Criticare Systems
Inc. (AMEX-CMD) and Healthrite Corporation.

Mr. Datsopoulos earned a bachelor's in Economics with high
honors and a law degree with honors, both from the University of Montana. Mr.
Datsopoulos and his partners have achieved the highest legal rating from the
most recognized national publication that rates attorneys based upon evaluations
by local attorneys and judges. He is a member of the State Bar of Montana,
American Bar Association, Montana Trial Lawyers Association, and the Association
of Trial Lawyers of America. Mr. Datsopoulos specializes in personal injury law,
criminal law, medical malpractice and general litigation practice.

TERM OF OFFICE

Our directors are appointed for a one-year term to hold office
until the next annual general meeting of our stockholders or until removed from
office in accordance with our bylaws. Our officers are appointed by our board of
directors and hold office until removed by the board.

COMMITTEES OF THE BOARD OF DIRECTORS

Audit Committee

Our audit committee currently consists of the following
directors: Anthony Harvey, Milton Datsopolous and John Carlesso. The audit
committee is responsible for:

|(1) | selection and oversight of our independent
    accountant;                                                                                              
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------
|(2) | establishing procedures for the receipt, retention and
      treatment of complaints regarding accounting, internal controls and
      auditing matters;
|(3) | establishing procedures for the confidential, anonymous
      submission by our employees of concerns regarding accounting and auditing
      matters;  
|(4) | engaging outside advisors; and                                                                                                                          
|(5) | funding for the outside auditory and any outside advisors
      engagement by the audit committee.                                                      

Our board of directors has adopted an Audit Committee Charter
which provides appropriate guidance to Audit Committee members as to their
duties.

Audit Committee Financial Expert

Our Board of Directors has determined that we do not presently
have a director who meets the definition of an audit committee financial
expert. We believe that the cost related to appointing a financial expert to
our Board of Directors at this time is prohibitive.

Disclosure Committee and Charter

We have a disclosure committee and disclosure committee
charter. The disclosure committee is comprised of all of our officers and
directors. The purpose of the committee is to provide assistance to the Chief
Executive Officer and the Chief Financial Officer in fulfilling their
responsibilities regarding the identification and disclosure of material
information about us, and the accuracy, completeness and timeliness of our
financial reports.

33

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CODE OF ETHICS

We adopted a Code of Ethics applicable to our Chief Executive
Officer, Chief Financial Officer, Corporate Controller and certain other finance
executives, which is a "code of ethics" as defined by applicable rules of the
SEC. Our Code of Ethics was attached as an exhibit to our Annual Report on Form
10-KSB for the year ended June 30, 2003, filed with the SEC on August 26, 2003.
If we make any amendments to our Code of Ethics other than technical,
administrative, or other non-substantive amendments, or grant any waivers,
including implicit waivers, from a provision of our Code of Ethics to our chief
executive officer, chief financial officer, or certain other finance executives,
we will disclose the nature of the amendment or waiver, its effective date and
to whom it applies in a Current Report on Form 8-K filed with the SEC.

COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT

Section 16(a) of the Securities Exchange Act of 1934 requires
our executive officers and directors, and persons who own more than 10% of a
registered class of our securities (Reporting Persons), to file reports of
ownership and changes in ownership with the SEC. Reporting Persons are required
by SEC regulations to furnish us with copies of all forms they file pursuant to
Section 16(a). Based solely on our review of such reports received by the
Company, and written representations from certain Reporting Persons that, other
than as described below, no other reports were required for those persons, we
believe that, during the year ended June 30, 2007, all Reporting Persons
complied with all Section 16(a) filing requirements applicable to them.

The following persons have failed to file, on a timely basis,
the identified reports required by Section 16(a) of the Securities Exchange Act
of 1934:

Name and Principal Position
    Number of Late Insider
      Reports
    Transactions Not Timely
      Reported
    Known Failures to File a
      Required FormBenjamin Ainsworth Director And Secretary
    None
    None
    NoneKurt Bordian Chief Financial Officer
    None
    None
    NoneJohn Carlesso Director
    One
    One
    OneMilton Datsopoulos Director
    None
    None
    NoneAnthony Harvey Director, Chairman and Chief
      Executive Officer
    None
    None
    NoneMark Reynolds Former Director and Former Vice-
      President, Finance
    One
    One
    NoneBryan Wilson Director, President and Treasurer
    None
    None
    None


34

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|ITEM 10. | EXECUTIVE COMPENSATION.
|-------- | -----------------------

Summary Compensation Table

The following table sets forth the total compensation paid to
or earned by our named executive officers, as that term is defined in Item
402(a)(2) of Regulation S-B as of our fiscal year ended June 30, 2007:

Name &PrincipalPosition
      Year
      Salary($)
      Bonus($)
      StockAwards
      OptionAwards
      Non-EquityIncentivePlanCompen-sation
      Non-qualifiedDeferredCompen-sationEarnings
      All OtherCompen-sation($)
      Total($)Anthony Harvey, 
        Director, Chairman and CEO(1)
      2007
      -
      -
      -
      -
      -
      -
      -
      -Kurt Bordian, 
        Chief Financial Officer(2)
      2007
      $58,830
      -
      -
      -
      -
      -
      -
      $58,830Mark A. Reynolds, Former Director and Former Vice-President,
        Finance(3)
      2007
      $120,000
      -
      -
      -
      -
      -
      -
      $120,000


|**Notes:**
|----------
|(1)       
|          
|(2)       
|          
|(3)       

Outstanding Equity Awards At Fiscal Year-End

The following table provides information concerning unexercised
options for each of our named executive officers, as that term is defined in
Item 402(a)(2) of Regulation S-B as of our fiscal year ended June 30, 2007:

Name and PrincipalPosition
      Number ofSecuritiesUnderlyingUnexercisedOptions (#)Exercisable
      Number ofSecuritiesUnderlyingUnexercisedOptions (#)Unexercisable
      Equity IncentivePlan Awards:Number ofSecuritiesUnderlyingUnexercisedUnearned Options
      OptionExercisePrice
      OptionExpirationDateAnthony Harvey Director, Chairman and CEO
      500,000
      -
      -
      $0.30
      Apr 8, 2010Kurt Bordian Chief Financial Officer
      500,000
      -
      -
      $0.50
      Apr 5, 2008Mark A. Reynolds
        Former Director and 
        Former Vice-
      President, Finance
      1,200,000
      -
      -
      $0.50
      Apr 5, 2011


35

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Director Compensation

The following table sets forth the compensation paid to our
directors for the fiscal year ended June 30, 2007.

Name
    Fees Earned or Paid
      in Cash ($)
    Stock Awards ($)
    Option Awards
      ($)
    Non-Equity Incentive Plan
      Compensation ($)
    Nonqualified Deferred
      Compensation Earnings ($)
    All Other Compensation
      ($)
    Total ($)Bryan Wilson
    -
    -
    -
    -
    -
    -
    -Benjamin Ainsworth
    -
    -
    -
    -
    -
    -
    -John Carlesso
    -
    -
    -
    -
    -
    -
    -Milton Datsopoulos
    -
    -
    -
    -
    -
    -
    -


Employment Agreements

On April 5, 2005, we entered into a consulting agreement with
Mr. Harvey, pursuant to which Mr. Harvey agreed to provide us with consulting
services in consideration of which we agreed to issue to Mr. Harvey 500,000
options to purchase shares of our common stock at a price of $0.30 per share.

We entered into a consulting agreement with Kurt Bordian dated
January 6, 2006, to serve as our Chief Financial Officer. The terms of the
agreement include $7,490 paid upon the execution of the agreement, $3,745 per
month beginning on February 1, 2006, and the option to acquire up to 500,000
shares of common stock at an exercise price of $0.50 per share for two years.
The agreement is for a term of one year. We will also reimburse Mr. Bordian for
all disbursements reasonably incurred by him for the purpose of providing the
consulting services to us.

On January 19, 2006, we entered into a consulting agreement
(the Consultant Agreement) with Mr. Reynolds. Pursuant to the terms of the
Consultant Agreement, Mr. Reynolds provided us with the following services: (a)
assisted with hiring and co-ordination of geological consultants for Canyon
Copper; (b) assisted us in establishing materials handling procedures; (c)
assisted us in establishing audit and compensation committees and finding
appropriate members for its committees; (d) assisted the President in developing
and implementing our business plans; (e) assisted us in retaining professional
advisors in North America in connection with compliance with our reporting
requirements under the Securities Exchange Act of 1934; and (f) general
administrative services as directed by us. In consideration of his consultant
services, we agreed to pay Mr. Reynolds $10,000 US per month and granted to Mr.
Reynolds 1,200,000 incentive stock options.

On September 25, 2007, we entered into a termination agreement
with Mr. Reynolds pursuant to which the consulting agreement we entered into
with Mr. Reynolds on January 19, 2006 was terminated. In accordance with the
terms of the termination agreement, we agreed to pay the remaining amounts owed
to Mr. Reynolds upon the earlier of two years from the date of the termination
agreement, or our completing financing with minimum net proceeds of $2,000,000.
Also, Mr. Reynolds agreed to waive all consulting fees payable to him for the
period from July 1, 2007 to September 25, 2007

|ITEM 11. | SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
      MANAGEMENT **AND RELATED STOCKHOLDER MATTERS.**
|-------- | ---------------------------------------------------------------------------------------------------------

The following table sets forth certain information concerning
the number of shares of our common stock owned beneficially as of September 11,
2007 by: (i) each of our directors and nominees, (ii) each of our named
executive officers, and (iii) officers and directors as a group. Other than as
described below, no person or group is known by us to beneficially own more than
5% of our outstanding shares of common stock. Unless otherwise indicated, the
stockholders listed possess sole voting and investment power with respect to the
shares shown.

36

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Title of Class
    Name and Address
      of Beneficial Owner
    Amount and Nature of
      Beneficial Ownership(1)
    Percentage of Common
      Stock(1)Directors and OfficersCommon Stock
    Anthony Harvey Director,
      Chairman and Chief Executive Officer Ste. 408  1199 West Pender
      Street 
        Vancouver, British Columbia, Canada V6E 2R1
    5,643,134 shares
      Direct(1)(2)
    7.7%Common Stock
    John Carlesso Director Suite 815 
      65 Queen St. W. 
        Toronto, Ontario Canada M4S 2E5
    2,000,000 shares Direct(1)(3)
    2.7%Common Stock
    Milton Datsopoulos Director
      Suite 201  201 West Main Street Missoula, MT 59802
    1,000,000 shares
      Direct(1)(4)
    1.4%Common Stock
    Bryan Wilson Director, President and
      Treasurer 84 Cedarcrest Crescent 
        Richmond Hill, Ontario, Canada L4S 2P4
    732,000 shares Direct(1)(5)
    1.0%Common Stock
    Kurt Bordian Chief Financial
      Officer #408  1199 West Pender Street Vancouver 
        British Columbia, Canada V6E 2R1
    540,000 shares
      Direct(1)(6)
    *Common Stock
    Benjamin Ainsworth Director And
      Secretary #408  1199 West Pender Street Vancouver 
        British Columbia, Canada V6E 2R1
    -Nil-
    *Common Stock
      All Officers and Directors as a Group (6 persons)
    9,915,134 shares Direct
    12.9%5% StockholdersCommon Stock
    Anthony Harvey Ste. 408 
      1199 West Pender Street 
        Vancouver, British Columbia, Canada V6E 2R1
    5,643,134 shares
      Direct(1)(2)
    7.7%Common Stock
    Clarion Finanz AG Gerbergasse 5
      Zurich, Switzerland CH 8023
    3,700,000 shares Direct
    5.1%Common Stock
    DRS Investments Ltd. 2063
      Indian Fort Dr. 
        Surrey, British Columbia, Canada V4A 3L7
    8,375,000 shares
      Direct(1)(7)
    11.3%Common Stock
    Mark A. Reynolds Former Director and
      Former Vice President, Finance Ste. 408  1199 West Pender Street
      
        Vancouver, British Columbia, Canada V6E 2R1
    8,939,998 shares Direct(1)(8)
    12.2%


Notes

|*   | Less than 1%.                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Applicable percentage of ownership is based on
      71,981,399 shares of Common Stock outstanding as of September 11, 2007
      together with securities exercisable or convertible into shares of Common
      Stock within 60 days of September 11, 2007 for each stockholder.
      Beneficial ownership is determined in accordance with the rules of the SEC
      and generally includes voting or investment power with respect to
      securities. Shares of

37

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|    | Common Stock subject to securities exercisable or
      convertible into shares of Common Stock that are currently exercisable or
      exercisable within 60 days of September 11, 2007 are deemed to be
      beneficially owned by the person holding such options for the purpose of
      computing the percentage of ownership of such person, but are not treated
      as outstanding for the purpose of computing the percentage ownership of
      any other person.                                          
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(2) | The number of shares listed as beneficially owned by Mr.
      Harvey consists of: (i) 4,160,000 shares of Common Stock owned directly by
      Mr. Harvey, (ii) options to purchase 500,000 shares of Common Stock
      exercisable at $0.30 per share owned directly by Mr. Harvey, and (iii) the
      conversion of $100,000 and CDN$50,000 into 491,567 shares of Common Stock
      and warrants to purchase 491,567 shares of Common Stock at $0.30 per
      share.                                            
|(3) | The number of shares listed as beneficially owned by Mr.
      Carlesso consists of 1,000,000 shares of common stock held directly by Mr.
      Carlesso and options to purchase 1,000,000 shares of Common Stock
      exercisable at $0.50 per share until April 5, 2008.                                                                                                                                                                                                                                             
|(4) | The number of shares listed as beneficially owned by Mr.
      Datsopoulos consists of: (i) options to purchase 500,000 shares of Common
      Stock exercisable at $0.30 per share until April 8, 2010; and (ii) options
      to purchase 500,000 shares of Common Stock exercisable at $0.50 per share
      until April 5, 2011.                                                                                                                                                                                    
|(5) | The number of shares listed as beneficially owned by Mr.
      Wilson consists of (i) 116,000 shares of Common Stock and warrants to
      purchase 116,000 shares of Common Stock held by Rocknest Corp, of which
      Mr. Wilson is the sole shareholder, and (ii) options to purchase 500,000
      shares of Common Stock exercisable at $0.50 per share until April 5,
      2008.                                                                                                                                
|(6) | The number of shares listed as beneficially owned by Mr.
      Bordian consists of (i) 20,000 shares of common stock owned directly by
      Mr. Bordian, (ii) warrants to purchase 20,000 shares of common stock
      exercisable at $0.50 per share, with each warrant entitling Mr. Bordian to
      purchase one additional share for a period of two years until February 28,
      2008, and (iii) options to purchase 500,000 shares of Common Stock
      exercisable at $0.50 per share until April 5, 2008.  
|(7) | The number of shares listed as beneficially owned by DRS
      Investments Ltd. consists of (i) 6,125,000 shares of Common Stock held
      directly by DRS Investments Ltd., (ii) warrants to purchase 1,000,000
      shares of Common Stock exercisable at $0.30 per share until December 15,
      2007, and (iii) warrants to purchase 1,250,000 shares of Common Stock
      exercisable at $0.50 per share until February 28, 2008.                                                                              
|(8) | The number of shares listed as beneficially owned by Mr.
      Reynolds consists of: (i) 7,499,998 shares of Common Stock held directly
      by Mr. Reynolds, (ii) 120,000 shares of Common Stock held by 0741673 B.C.
      Ltd., a British Columbia company controlled by Mr. Reynolds, (iii)
      warrants to purchase 120,000 shares of Common Stock exercisable at $0.30
      per share until June 29, 2008, and (iv) options to purchase 1,200,000
      shares of Common Stock exercisable at $0.50 per
share.

CHANGE IN CONTROL

We are not aware of any arrangement that might result in a
change of control.

EQUITY COMPENSATION PLAN INFORMATION

On April 5, 2006, our Board of Directors approved the 2006
Stock Incentive Plan (the "2006 Plan"). At our special meeting of stockholders
held on August 3, 2006, our stockholders approved the 2006 Plan. The 2006 Plan
became effective on April 5, 2006. The 2006 Plan provides that the option price
be the fair market value of the stock at the date of grant as determined by our
Board of Directors. Options granted become exercisable and expire as determined
by our Board of Directors, see 2006 Stock Incentive Plan, below.

Our 2004 Non-qualified Stock Option Plan (the 2004 Plan) is
intended to provide incentives to our employees, directors and consultants by
providing them with opportunities to purchase shares of our common stock. The
2004 Plan is effective as of June 17, 2004 and all stock options granted under
the 2004 Plan must be granted within ten years from the date the 2004 Plan was
adopted. We originally registered the 2004 Plan on June 17, 2004 pursuant to a
registration statement on Form S-8. Effective April 6, 2005, we amended the 2004
Plan and increased the total of common shares reserved for issuance under the
2004 Plan from one million to a total of four million common shares.

Our Board of Directors is authorized to administer the 2004
Plan. In doing so, our Board of Directors may: (i) designate optionees; (ii)
determine the terms and provisions of respective option agreements (which need
not be identical) including, but not limited to, the number of shares to be
covered by each option, provisions concerning the time or times when and the
extent to which the options may be exercised, and the nature and duration of
restrictions as to transferability or restrictions constituting substantial risk
of forfeiture; (iii) accelerate the right of an optionee to exercise, in whole
or in part, any previously granted option; (iv) interpret

38

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the provisions and supervise the administration of the 2004
Plan; (v) determine the fair market value of shares issuable under the 2004
Plan; (vi) designate the type of options to be granted to an optionee; and (vii)
determine any other matter which is necessary or desirable for, or incidental
to, the administration of the 2004 Plan.

The following table sets forth certain information concerning
all equity compensation plans previously approved by stockholders and all
previous equity compensation plans not previously approved by stockholders, as
of the most recently completed fiscal year.

EQUITY COMPENSATION PLAN INFORMATION AS AT JUNE 30, 2007Plan
      Category
    Number of
      securities to be issued upon exercise of outstanding
      options, warrants and rights (a)
    Weighted-average exercise price
      of outstanding options, warrants and rights
      (b)
    Number of securities remaining available
      for future issuance under equity compensation
      plans (excluding securities reflected in
      column (a)) (c)Equity Compensation Plans approved by security
      holders
    7,200,000
    $0.50 per share
    3,223,750Equity Compensation Plans not approved by security
      holders
    1,500,000
    $0.30 per share
    2,500,000Total
    8,700,000
    $0.47 per share
    5,723,750


2006 Stock Incentive Plan

On April 5, 2006, we established our 2006 Stock Incentive Plan
(the 2006 Plan). The purpose of the 2006 Plan is to enhance the long-term
stockholder value of the Company by offering opportunities to our directors,
officers, employees and eligible consultants and any entity that directly or
indirectly is in control of or is controlled by the Company (a Related
Company) to acquire and maintain stock ownership in the Company in order to
give these persons the opportunity to participate in our growth and success, and
to encourage them to remain in our service or a Related Company.

The 2006 Plan is administered by our Board of Directors or by a
committee of two or more non-employee directors appointed by our Board of
Directors (the "Plan Administrator"). Subject to the provisions of the 2006
Plan, the Plan Administrator has full and final authority to grant the awards of
stock options and to determine the terms and conditions of the awards and the
number of shares to be issued pursuant thereto. Options granted under the 2006
Plan may be either "incentive stock options," which qualify for special tax
treatment under the Internal Revenue Code of 1986, as amended, (the "Code"),
nonqualified stock options or restricted shares.

All of our employees and members of our Board of Directors are
eligible to be granted options. Individuals who have rendered or are expected to
render advisory or consulting services to us are also eligible to receive
options. The maximum number of shares of our Common Stock with respect to which
options or rights may be granted under the 2006 Plan to any participant is
10,423,750 shares with the number of authorized shares under the 2006 Plan
increasing on the first day of each quarter beginning with the fiscal quarter
commencing April 1, 2006 by the lesser of the following amounts: (1) 15% of the
total increase in the number of shares of Common Stock outstanding during the
previous fiscal quarter; or (2) a lesser number of shares of Common Stock as may
be determined by the Board, subject to certain adjustments to prevent
dilution.

39

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The exact terms of the option granted are contained in an
option agreement between us and the person to whom such option is granted.
Eligible employees are not required to pay anything to receive options. The
exercise price for incentive stock options must be no less than 75% of the fair
market value of the Common Stock on the date of grant. The exercise price for
nonqualified stock options is determined by the Plan Administrator in its sole
and complete discretion. An option holder may exercise options from time to
time, subject to vesting. Options will vest immediately upon death or disability
of a participant and upon certain change of control events.

The Plan Administrator may amend the 2006 Plan at any time and
in any manner, subject to the following: (1) no recipient of any award may,
without his or her consent, be deprived thereof or of any of his or her rights
thereunder or with respect thereto as a result of such amendment or termination;
and (2) any outstanding incentive stock option that is modified, extended,
renewed, or otherwise altered must be treated in accordance with Section 424(h)
of the Code.

The 2006 Plan terminates on April 5, 2016 unless sooner
terminated by action of our Board of Directors. All awards granted under the
2006 Plan expire ten years from the date of grant, or such shorter period as is
determined by the Plan Administrator. No option is exercisable by any person
after such expiration. If an award expires, terminates or is canceled, the
shares of our Common Stock not purchased thereunder may again be available for
issuance under the 2006 Plan.

We have not yet filed a registration statement under the
Securities Act of 1933 to register the shares of our Common Stock reserved for
issuance under the 2006 Plan.

None of the following persons has any substantial or material
interest, directly or indirectly, by way of beneficial ownership of securities
or otherwise, in any matter to be acted on at the special meeting except for our
current and future directors and executive officers inasmuch as they may be
granted stock options or stock awards pursuant to our 2006 Plan:

|1. | each person who has been one of our directors or
      executive officers at any time since the beginning of our last fiscal
      year;
|-- | ----------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                         
|2. | each nominee for election as one of our directors;
    or                                                                               
|   |                                                                                                                                         
|3. | any affiliate or associate of any of the foregoing
      persons.                                                                       

|ITEM 12. | CERTAIN RELATIONSHIPS AND RELATED
      TRANSACTIONS, AND DIRECTOR **INDEPENDENCE.**
|-------- | ------------------------------------------------------------------------------------

None of the following parties has during the past two fiscal
years had any material interest, direct or indirect, in any transaction with us
or in any presently proposed transaction that has or will materially affect us,
other than as noted in this section:

| | (i)   | Any of our directors or officers;                                                                                                                                          
| | ----- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (ii)  | Any person proposed as a nominee for election as a
      director;                                                                                                         
| | (iii) | Any person who beneficially owns, directly or indirectly,
      shares carrying more than 5% of the voting rights attached to our
      outstanding shares of common stock;
| | (iv)  | Any of our promoters; and                                                                                                                                                  
| | (v)   | Any member of the immediate family (including spouse,
      parents, children, siblings and in-laws) of any of the foregoing
      persons.                                

On February 13, 2006, we issued 63,744 shares of our common
stock to settle $19,123 owing to our former Chief Financial Officer.

During the year ended June 30, 2006, we paid $20,122 for rent
  and $41,403 for general and administrative costs to a company controlled by
  our former President.

40

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On August 16, 2006, we received a loan of CDN$25,000 from
  Anthony Harvey, our Chief Executive Officer, Chairman and a member of our Board
  of Directors. The loan is evidenced by an unsecured promissory note. The loan
  bears an interest rate of 15% per annum and matures on October 30, 2007.

On April 25, 2007 we entered into two loan agreements with Mr.
Harvey pursuant to which we received loans of US$100,000 and CDN$50,000. The
loans are evidenced by an unsecured convertible promissory note. The loans bear
interest at a rate of 15% per annum and mature on March 14, 2008 and April 25,
2008, respectively. Each of the loans is convertible at the option of Mr. Harvey
at any time prior to maturity into units of Canyon at a price of $0.30 per unit,
with each unit consisting of one share of our common stock and one share
purchase warrant. Each warrant will entitle Mr. Harvey to purchase an additional
share of our common stock at a price of $0.35 per share for a period of two
years from the date of issuance of the units

On June 29, 2007, we issued 21,200 shares of our common stock
to settle $5,300 owing to our former Chief Financial Officer. As at June 30,
2007, we were indebted to the former Chief Financial Officer of the Company for
$Nil (June 30, 2006 - $4,970).

During the year ended June 30, 2006, we paid consulting fees of
$24,450 (2006 - $10,130) to Bryan Wilson, our President and a member of our
board of directors.

As at June 30, 2007, we were indebted to the former Vice
President of the Company for $14,980 (June 30, 2006  $2,294). The amount due is
non-interest bearing, unsecured and due on demand.

As at June 30, 2007, we were indebted to our former President
Mr. Jardine and a company controlled by Mr. Jardine in the amount of $Nil (June
30, 2006 - $1,828).

Director Independence

Our common stock is listed on the OTC Bulletin Board
inter-dealer quotation system, which does not have director independence
requirements. For the purpose of determining director independence, we have
applied the definitions set out in NASDAQ Rule 4200(a)(15). Under NASDAQ Rule
4200(a)(15), a director is not considered independent if he or she is an
executive officer or employee of the corporation. Our board of directors have
determined that John Carlesso and Milton Datsopoulos are independent directors
as defined under NASDAQ Rule 4200(a)(15). During the fiscal year ended June
2007, Mr. Carlesso and Mr. Datsopoulos served on the audit committee and the
disclosure committee.

|ITEM 13. | EXHIBITS.
|-------- | ---------

|Exhibit |                                                                                                                                                                                        
|------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Number  | Description of Exhibit                                                                                                                                                                 
|3.1     | Amended and Restated Articles
      of Incorporation.(15)                                                                                                                              
|3.2     | Bylaws.(1)                                                                                                                                                                             
|4.1     | Specimen Stock
      Certificate.(15)                                                                                                                                                  
|10.1    | 2004 Nonqualified Stock Option
      Plan.(4)                                                                                                                                          
|10.2    | 2006 Stock Incentive Plan dated
      April 5, 2006.(11)                                                                                                                               
|10.3    | Convertible Preferred Stock Purchase Agreement
      dated July 29, 2004 between the Company and Langley Park Investments
      PLC.(5)                                                
|10.4    | Debenture Purchase Agreement
      dated November 19, 2004 between the Company and Glenkirk
      International.(7)                                                                    
|10.5    | Convertible, Callable, Subordinated Debenture
      dated November 19, 2004 between the Company and Glenkirk
      International.(7)                                                   
|10.6    | Property Option Agreement dated
      March 18, 2004 among the Company, Robert & Sharon Weicker, Kurt &
      Tami Schendel, and Nevada Sunrise LLC (New York Canyon
      Project).(3)

41

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|Exhibit |                                                                                                                                                   
|------- | --------------------------------------------------------------------------------------------------------------------------------------------------
|Number  | Description of Exhibit                                                                                                                            
|10.7    | Lease Agreement dated July 21, 2004 between the Company
      and Jaycor Mining, Inc.(6)                                                          
|10.8    | Consulting Agreement dated April 5, 2005 between the
      Company and Anthony Harvey.(8)                                                         
|10.9    | Consulting Agreement dated August 5, 2005 between the
      Company and Chris Broili.(12)                                                         
|10.10   | Consulting Agreement dated August 10, 2005 between the
      Company and Mel Klohn.(12)                                                           
|10.11   | Consulting Agreement dated August 22, 2005 between the
      Company and Carlo Civelli.(12)                                                       
|10.12   | Consulting Agreement dated September 20, 2005 between the
      Company and Richard Dixon.(9)                                                     
|10.13   | Consulting Agreement dated September 20, 2005 between the
      Company and Richard Kehmeier.(9)                                                  
|10.14   | Consulting Agreement dated January 6, 2006 between the
      Company and Kurt Bordian.(10)                                                        
|10.15   | Consulting Agreement dated January 19, 2006 between the
      Company and Mark A. Reynolds.(9)                                                    
|10.16   | Consulting Agreement dated February 1, 2006 between the
      Company and Linda Erdman.(9)                                                        
|10.17   | Consulting Agreement dated February 1, 2006 between the
      Company and Geoffrey Goodall.(9)                                                    
|10.18   | Consulting Agreement dated February 1, 2006 between the
      Company and Robert Young.(12)                                                       
|10.19   | Debt Settlement Agreement dated November 8, 2005 between
      the Company and Cameron Reynolds.(12)                                              
|10.20   | Mineral Processing Research Agreement dated March 22,
      2006 among the Company, Nevada Sunrise, LLC and INTOR Resources
      Corporation.(12)
|10.21   | Loan Agreement dated September 12, 2006 between the
      Company and Aton Ventures Fund Ltd.(13)                                                 
|10.22   | Loan Agreement dated September 11, 2006 between the
      Company and Asset Protection Fund Ltd.(13)                                              
|10.23   | Convertible Promissory Note dated September 12, 2006
      between the Company and Aton Ventures Fund Ltd.(13)                                    
|10.24   | Convertible Promissory Note dated September 11, 2006
      between the Company and Asset Protection Fund Ltd.(13)                                 
|10.25   | Promissory Note dated August 16, 2006 between the Company
      and Susan Hand.(14)                                                               
|10.26   | Promissory Note dated August 16, 2006 between the Company
      and Walter Kondrosky.(14)                                                         
|10.27   | Promissory Note dated August 16, 2006 between the Company
      and Anthony Harvey.(14)                                                           
|10.28   | Promissory Note dated August 16, 2006 between the Company
      and Kathy Huettl.(14)                                                             
|10.29   | Promissory Note dated August 16, 2006 between the Company
      and Bob Gibb.(14)                                                                 
|10.30   | Promissory Note dated November 7, 2006 between the
      Company and Kathy Huettl.(16)                                                            
|10.31   | Promissory Note dated November 7, 2006 between the
      Company and Terry Fields.(16)                                                            
|10.32   | First Amendment Loan Agreement dated November 27, 2006
      between the Company and Aton Ventures Fund Ltd.(17)                                  
|10.33   | First Amendment to Loan Agreement dated November 27, 2006
      between the Company and Asset Protection Fund Ltd.(17)                            
|10.35   | Convertible Promissory Note dated November 27, 2006
      between the Company and Aton Ventures Fund Ltd.(17)                                     
|10.36   | Convertible Promissory Note dated November 27, 2006
      between the Company and Asset Protection Fund Ltd.(17)                                  
|10.37   | Quitclaim Deed for the New York Canyon Project dated
      March 12, 2007.(18)                                                                    

42

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|Exhibit |                                                                                                                                                                       
|------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Number  | Description of Exhibit                                                                                                                                                
|10.38   | Service Agreement
        dated February 1, 2007 between the Company and Geoffrey Goodall.                                                                            
|10.39   | Sponsorship Agreement dated March
        29, 2007 between the Company and Union Securities Ltd.                                                                      
|10.40   | Engagement Letter
        dated March 29, 2007 between the Company and Union Securities Ltd.                                                                          
|10.41   | Second Amendment to Loan Agreement
        dated April 12, 2007 between the Company and Aton Ventures Fund Ltd.                                                       
|10.42   | Second Amendment
        to Loan Agreement dated April 11, 2007 between the Company and Asset Protection
        Fund Ltd.                                            
|10.43   | Loan Agreement dated April 25,
        2007 between the Company and Aton Select Fund Limited.                                                                         
|10.44   | Loan Agreement
        dated April 25, 2007 between the Company and Anthony Harvey for the loan
        of CDN$50,000.                                                
|10.45   | Loan Agreement dated April 25,
        2007 between the Company and Anthony Harvey for the loan of $100,000.                                                          
|10.46   | Promissory Note
        dated April 25, 2007 between the Company and Aton Select Fund Limited.                                                                        
|10.47   | Promissory Note dated April 25,
        2007 between the Company and Anthony Harvey for the loan of CDN$50,000.                                                       
|10.48   | Promissory Note
        dated April 25, 2007 between the Company and Anthony Harvey for the loan
        of $100,000.                                                 
|10.49   | Termination
        Agreement dated September 25, 2007 between the Company and Mark Reynolds.                                                                         
|14.1    | Code of Ethics.(2)                                                                                                                                                    
|31.1    | Certification
        of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley
        Act of 2002.                                               
|31.2    | Certification
        of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley
        Act of 2002.                                               
|32.1    | Certification
        of Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as
        adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|32.2    | Certification
        of Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as
        adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|99.1    | Audit committee Charter.(2)                                                                                                                                           
|99.2    | Disclosure Committee
        Charter.(2)                                                                                                                              

| | (1)  | Filed with the SEC as an exhibit to our Registration
      Statement on Form SB-2 originally filed on April 26, 2000.
| | ---- | ---------------------------------------------------------------------------------------------------------------------
| | (2)  | Filed with the SEC as an exhibit to our Annual Report on
      Form 10-KSB filed on August 26, 2003.                 
| | (3)  | Filed with the SEC as an exhibit to our Current Report on
      Form 8-K filed on April 8, 2004.                     
| | (4)  | Filed with the SEC as an exhibit to our Registration
      Statement on Form S-8 filed on June 17, 2004.             
| | (5)  | Filed with the SEC as an exhibit to our Current Report on
      Form 8-K filed on August 20, 2004.                   
| | (6)  | Filed with the SEC as an exhibit to our Annual Report on
      Form 10-KSB filed on October 8, 2004.                 
| | (7)  | Filed with the SEC as an exhibit to our Quarterly Report
      on Form 10-QSB filed on February 22, 2005.            
| | (8)  | Filed with the SEC as an exhibit to our Quarterly Report
      on Form 10-QSB filed on May 23, 2005.                 
| | (9)  | Filed with the SEC as an exhibit to our Current Report on
      Form 8-K filed on February 7, 2006.                  
| | (10) | Filed with the SEC as an exhibit to our Quarterly Report
      on Form 10-QSB filed on February 16, 2006.            
| | (11) | Filed with the SEC as an exhibit to our Current Report on
      Form 8-K filed on April 10, 2006.                    
| | (12) | Filed with the SEC as an exhibit to our Quarterly Report
      on Form 10-QSB filed on May 22, 2006.                 
| | (13) | Filed with the SEC as an exhibit to our Current Report on
      Form 8-K filed on September 15, 2006.                
| | (14) | Filed with the SEC as an exhibit to our Current Report on
      Form 8-K filed on September 7, 2006.                 

43

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| | (15) | Filed with the SEC as an exhibit to our Annual Report on
      Form 10-KSB filed on October 13, 2006.    
| | ---- | ---------------------------------------------------------------------------------------------------------
| | (16) | Filed with the SEC as an exhibit to our Quarterly Report
      on Form 10-QSB filed on November 20, 2006.
| | (17) | Filed with the SEC as an exhibit to our Current Report on
      Form 8-K filed on December 13, 2006.     
| | (18) | Filed with the SEC as an exhibit to our Current Report on
      Form 8-K filed on March 26, 2007.        

|ITEM 14. | PRINCIPAL ACCOUNTANT FEES AND SERVICES
|-------- | --------------------------------------

Audit Fees

The aggregate fees billed for the two most recently completed
fiscal years ended June 30, 2007 and June 30, 2006 for professional services
rendered by the principal accountant for the audit of our annual financial
statements and review of the financial statements included our Quarterly Reports
on Form 10-QSB and services that are normally provided by the accountant in
connection with statutory and regulatory filings or engagements for these fiscal
periods were as follows:

Year Ended June 30, 2007
    Year Ended June 30, 2006Audit Fees
      $40,652
    $33,300Audit Related Fees
      $700
    -Tax Fees
    -
    $5,200All Other Fees
    -
    -Total
      $41,352
    $38,500


Policy on Pre-Approval by Audit Committee of Services
Performed by Independent Auditors

The policy of our Audit Committee is to pre-approve all audit
and permissible non-audit services to be performed by our independent auditors
during the fiscal year. Non-audit services that are prohibited to be provided by
our independent auditors may not be pre-approved. In addition, prior to the
granting of any pre-approval, our Audit Committee must be satisfied that the
performance of the services in question will not compromise the independence of
the independent auditors.

No services related to Audit-Related Fees, Tax
Fees or All Other Fees described above were approved by the Audit
Committee pursuant to the waiver of pre-approval provisions set forth in the
applicable rules of the SEC.

44

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SIGNATURES

In accordance with Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.

CANYON COPPER CORP.

|By: | /s/ Anthony Harvey                         | 
|--- | ------------------------------------------ | 
|    | ANTHONY HARVEY                             | 
|    | Chairman and Chief Executive
      Officer | 
|    | Director                                   | 
|    | (Principal Executive Officer)              | 
|    | Date: September 28, 2007                   | 

In accordance with the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.

|Signature              |  | Title                                 | Date              
|---------------------- |  | ------------------------------------- | ------------------
|                       |  |                                       |                   
|                       |  | Chairman, Chief Executive Officer and | September 28, 2007
|/s/ Anthony Harvey     |  | Director                              |                   
|ANTHONY HARVEY         |  | (Principal Executive Officer)         |                   
|                       |  |                                       |                   
|                       |  |                                       |                   
|/s/ Bryan Wilson       |  | President, Treasurer and Director     | September 28, 2007
|BRYAN WILSON           |  |                                       |                   
|                       |  |                                       |                   
|                       |  | Chief Financial Officer               |                   
|/s/ Kurt Bordian       |  | (Principal Financial Officer)         | September 28, 2007
|KURT BORDIAN           |  |                                       |                   
|                       |  |                                       |                   
|                       |  |                                       |                   
|/s/ John Carlesso      |  | Director                              | September 28, 2007
|JOHN CARLESSO          |  |                                       |                   
|                       |  |                                       |                   
|                       |  |                                       |                   
|/s/ Milton Datsopoulos |  | Director                              | September 28, 2007
|MILTON DATSOPOULOS     |  |                                       |                   

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